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Usage percentage calculations

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Usage percentage calculations

Hey guys, quick question. In calculating a FICO score is usage percentage calculated off the total amount of credit available or does it go card by card? I.E.: If I have 5 CC all with $1000 limit, is it the same to have 1 maxed out and the other 4 with 0 balance=20% usage than to owe $200 on each=20% usage. Thanks in advance for your help

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Super Contributor

Re: Usage percentage calculations

There are 3 things at play here.  First, aggregate [overall] utilization.  Second is individual card highest utilization and last is number of accounts with balances.

 

Aggregate utilization is King to the other factors mentioned above.  With aggregate utilization being a constant (say 20%) you'd experience a greater score ding with one card maxed out at 100% utilization with the rest at $0 compared to the ding you'd receive in having more (all) accounts with balances at low utilization, as your highest individual card utilization would be 20%.

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New Member

Re: Usage percentage calculations

Thank you so much for your help

Message 3 of 4
Super Contributor

Re: Usage percentage calculations


@Sarkis wrote:

Thank you so much for your help


I agree with what @BrutalBodyShots said but would add:

 

1. Utilization isn't usage; FICO utilization is computed as of the one day out of the month which reports a balance. In most accounts, but not all, it is the statement balance that gets reported.

 

2. All 3 of the components BBS mentioned count.

 

It's optimal to:

 

-have aggregate utilization at 9% or less

-have no individual utilization greater than 28% and

-have most, but not all, cards reporting a zero balance.


Total revolving limits 720500 (594000 reporting) 10/2/19 FICO 8 scores: EQ 744 TU 782 EX 746
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