cancel
Showing results for 
Search instead for 
Did you mean: 

Utilization Percentage on one card, vs. Overall ?

Auto Loans for ANY Credit Situation. Immediate Response.
Advertiser disclosure
Highlighted
Valued Member

Utilization Percentage on one card, vs. Overall ?

I have always thought that overall utilization was the main determing factor when it comes to calculating FICO scores.  But, after reading the fourms, it seems that individual card utilization matters too.  Can anyone recommend which card I should pay down first for the biggest jump? I have made some mistakes in the past and I am trying to get more responsible with my finances, and possibly buy a house in the future.

 

Let's say I have $1000 this month to pay down debt. Should I pay one card off in full,  or send two cards $500?

Capital One Plat. Limit $500 /  Bal $445

Capital One QS. Limit $1100 / Bal $1031

Merrick Bank.  Limit $1400 / Bal $1060

Credit One. Limit $800 / Bal $709

First Premier. Limit $700 / Bal $555

First Premier. Limit $700 / Bal $545 (Yes, I have two, unfortunately)

Brylane Home. Limit $780 / Bal $385

Milestone Bank. Limit $300 / Bal $114

Overstock Card - Limit $300 /  Bal $0

F21 Store Card. Limit $250 / Bal $0

Walmart card - Balance $0 (closed)

Thanks in advance.

Goal: Pay off all the sub prime cards I opened and get my utilization down.
Scores 10/02/18: TU 638, EX 601, EQ 605
Scores 10/16/18: TU 671, EX 637, EQ 638
Scores 11/01/18: TU 682, EX 651, EQ 647
Trying to get into the 700s club, I hear they have the best margaritas
Message 1 of 28
27 REPLIES 27
Community Leader
Senior Contributor

Re: Utilization Percentage on one card, vs. Overall ?

Overall utilization is "king," as BrutalBodyShots would say. But individual card utilization is important too. It's determined by the card with the highest utilization.

 

In your case, individual card utilization is especially important because several cards are maxed or near maxed. That's a big scoring hit. The good news is that all plans of attack address overall utilization, so you can let it go along for the ride when you determine how you'd like to pay.

 

Number/percentage of cards reporting non-zero balances factors in too. But until you bring your individual card utilization down quite a bit, gains from paying cards to zero will be minimal.

 

Known scoring thresholds are at 8.9%, 28.9%, 48.9%, 68.9%, and 88.9% (maxed). With your hypothetical $1,000, I'd try to bring all cards down to 67% utilization. That should allow you to remain under 68.9% once the next statement tacks on interest. This should leave a little over $200 to play with. Use that to pay off the small $114 Milestone balance. Anything left over can go toward the $385 Brylane balance.

Message 2 of 28
Highlighted
Valued Member

Re: Utilization Percentage on one card, vs. Overall ?

Did not know about these threshholds. Thank you so much.

Goal: Pay off all the sub prime cards I opened and get my utilization down.
Scores 10/02/18: TU 638, EX 601, EQ 605
Scores 10/16/18: TU 671, EX 637, EQ 638
Scores 11/01/18: TU 682, EX 651, EQ 647
Trying to get into the 700s club, I hear they have the best margaritas
Message 3 of 28
Highlighted
Valued Member

Re: Utilization Percentage on one card, vs. Overall ?

Sorry! One more question. Would you know if the threshholds also apply to installment loans? Such as car payments, etc?

Goal: Pay off all the sub prime cards I opened and get my utilization down.
Scores 10/02/18: TU 638, EX 601, EQ 605
Scores 10/16/18: TU 671, EX 637, EQ 638
Scores 11/01/18: TU 682, EX 651, EQ 647
Trying to get into the 700s club, I hear they have the best margaritas
Message 4 of 28
Highlighted
Super Contributor

Re: Utilization Percentage on one card, vs. Overall ?

There is something analogous which is called Installment Utilization or Balance/Loan ratio.  It matters in FICO 8.  You get 30-40 points from having open loans that are mostly but not entirely paid off (total IU of < 8.99%) -- compared with loans on which you owe most of the original loan amount (> 90%).  Exactly where the middle breakpoints are nobody knows for sure.

 

Do you have any open loans?

Message 5 of 28
Highlighted
Valued Member

Re: Utilization Percentage on one card, vs. Overall ?

Yes. I have two open installment loans. One is a car loan (sitting at 79% remaining) and the other a loan I took out for my child's orthodontics that is at 50% remaining. 

Goal: Pay off all the sub prime cards I opened and get my utilization down.
Scores 10/02/18: TU 638, EX 601, EQ 605
Scores 10/16/18: TU 671, EX 637, EQ 638
Scores 11/01/18: TU 682, EX 651, EQ 647
Trying to get into the 700s club, I hear they have the best margaritas
Message 6 of 28
Highlighted
Community Leader
Senior Contributor

Re: Utilization Percentage on one card, vs. Overall ?

FICO doesn't clobber you for high installment utilization like it does for high credit card utilization. There's no significant reason to accelerate your loan payments unless you want to save on interest.

Message 7 of 28
Highlighted
Moderator Emeritus

Re: Utilization Percentage on one card, vs. Overall ?


@HeavenOhio wrote:

FICO doesn't clobber you for high installment utilization like it does for high credit card utilization. There's no significant reason to accelerate your loan payments unless you want to save on interest.


Yup, and even then in the saving on interest one would almost assuredly be better off paying revolvers.

 

I'd simply apply the payment to the highest APR, then any remaining to the next highest etc... at some level FICO scores don't matter much in comparison to finances, and getting out of debt the quickest and least amount of interest paid is generally the right path for everyone.




        
Message 8 of 28
Highlighted
Senior Contributor

Re: Utilization Percentage on one card, vs. Overall ?


@Texasbabycakes wrote:

I have always thought that overall utilization was the main determing factor when it comes to calculating FICO scores.  But, after reading the fourms, it seems that individual card utilization matters too.  Can anyone recommend which card I should pay down first for the biggest jump? I have made some mistakes in the past and I am trying to get more responsible with my finances, and possibly buy a house in the future.

 

Let's say I have $1000 this month to pay down debt. Should I pay one card off in full,  or send two cards $500?

Capital One Plat. Limit $500 /  Bal $445

Capital One QS. Limit $1100 / Bal $1031

Merrick Bank.  Limit $1400 / Bal $1060

Credit One. Limit $800 / Bal $709

First Premier. Limit $700 / Bal $555

First Premier. Limit $700 / Bal $545 (Yes, I have two, unfortunately)

Brylane Home. Limit $780 / Bal $385

Milestone Bank. Limit $300 / Bal $114

Overstock Card - Limit $300 /  Bal $0

F21 Store Card. Limit $250 / Bal $0

Walmart card - Balance $0 (closed)

Thanks in advance.


Given all the highly utilized cards, not sure you will see a significant score increase regardless of the payment approach. That being said, if you want to minimize risk of adverse action on cards, make something more than the minimum payment on all cards at least until they are below 49% utilization. Also, put focus on a paydown strategy that gets utilization levels down below 69% before paying cards to zero. Then consider paying off highest APR cards while continuing to make more than minimum payments on all cards.

 

Good luck.

Fico 9: .......EQ 850 TU 850 EX 850
Fico 8: .......EQ 850 TU 850 EX 850
Fico 4 .....:. EQ 809 TU 823 EX 830 EX Fico 98: 842
Fico 8 BC:. EQ 892 TU 900 EX 900
Fico 8 AU:. EQ 887 TU 897 EX 899
VS 3.0:...... EQ 835 TU 835 EX 835
CBIS: ........EQ LN Auto 940 EQ LN Home 870 TU Auto 902 TU Home 950
Message 9 of 28
Highlighted
Valued Member

Re: Utilization Percentage on one card, vs. Overall ?

Got it. I've made myself a spreadsheet with the pay-downs needed to get each major card under the 69% tier, for starters. ..Then I'm going to aim for the next level, etc. Keep chipping away at the debt as much as possible, starting with the high interest predatory cards I wish I'd never opened...

I've also read about how to make reporting dates work in your favor, and will be putting that to use as well, for small purchases, because I've read that you should show some charging activity, so the account doesn't get closed (I believe).

Thanks y'all.
Goal: Pay off all the sub prime cards I opened and get my utilization down.
Scores 10/02/18: TU 638, EX 601, EQ 605
Scores 10/16/18: TU 671, EX 637, EQ 638
Scores 11/01/18: TU 682, EX 651, EQ 647
Trying to get into the 700s club, I hear they have the best margaritas
Message 10 of 28
Advertiser Disclosure: The offers that appear on this site are from third party advertisers from whom FICO receives compensation.