Utilization Question

[palmbeachwife]

I wish I had a MC or Visa with a high limit, but I don't. Suppose I have these cards and limits:

Kay $3000

Firestone $2000

Macy's  $1562

Cap 1 $300

HSBC $400

BestBuy $300

The card limits are close to $8000. I need to purchase a plane ticket on the Orchard card, which will max the card. Will FICO call the mafia and put out a hit for one maxed out card? Or will I be okay because my overall utilization will still be under 10%?

I already asked for a cli and was denied. It was a hard pull, too. Darn, it.

[palmbeachwife]

Does anyone have any ideas about this?

[llecs]

You could get a ding because FICO considers individual utilizations too. Though when you pay it your score would recover, assuming it even got dinged. I don't see a point drop more than 10 pts anyway.

[palmbeachwife]

Thanks for responding. I didn't know FICO considers individual card utilization. Guess I'll save up for the tickets and pay them via my debit card like always. I really appreciate your answer. Kudo's and Solution Solved goes to you.

[llecs]

Thanks. Remember, you could time things just right. HSBC products like your Orchard report only once a month. They will report the balance you had on that card as of the last business day of the month. So, you could purchase the tickets and then PIF by the end of the month (28th at latest) to get it to report $0 sometime the following month.

[haulingthescoreup]

And I know you were joking, but for any newer members reading, FICO doesn't notify other creditors when a balance goes up. Creditors "soft" your credit reports, looking for indications that there might be trouble on the financial horizon. If they see that a balance has jumped up, nearly maxing out an individual account, they may (or may not) react.

All depends on who's softing you, how frequently, what they see when they do, and if and how they react.

[palmbeachwife]

Thanks for clarifying. I was joking, but I didn't think about other creditors (which I should have), I was thinking about a FICO hit to my score for having one maxed out card within the balance of the entire utilization under 10%.

As confusing as this easy, I definitely don't mean to confuse anyone.

[haulingthescoreup]

No prob! --we just get so many posts from new members who say, "I just read that so-and-so, but when it happened to me, then blah-de-blah..." and we're off and running.

From what I can tell from what is on my reports and what others have posted, the total util carries more weight than whether individual cards are maxed, but the individual stuff still counts. Many of us have found that we're OK with one card posting high util (out of 7 or 8 or more, say), but if a second card posts high util, whammo. This was true for me when I had a card at 82% util after a BT, but I was still sweating bullets.

This is definitely a grey area in scoring, and what we know is completely anecdotal. It's too much to hope that when the propellor-beanie types developed the scoring algorithm that they might acknowledge that having one high-util card --for instance, for a 0% BT --would not be a scoring risk, while two or more would, but they swear that they just go by what the statistics indicate.

You might in fact dodge a bullet with just one card with high util, at least in terms of scoring. But we don't know enough to be able to give anything better than that, and as for what the lenders might do, now we're in a completely different world.

Good luck to you, however you work this!