Utilization on less than 1/3 of open cards

[Fernando1]

I read in another topic this information, to improve your credit score:

• Utilization on less than 1/3 of open cards -- if you have 4-6 cards total, you want to show usage on only 1 of them.  If you have 7 or more cards, 2 cards showing activity is fine.  This hurts your FICO score for too many cards showing usage.

Could someone clarify me? Wouldn't it be better to use all of your cards, to show them you use your credit responsibly? (of course low utilization, for instance 5% each)

[SouthJamaica]

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@Fernando1 wrote:

I read in another topic this information, to improve your credit score:

• Utilization on less than 1/3 of open cards -- if you have 4-6 cards total, you want to show usage on only 1 of them.  If you have 7 or more cards, 2 cards showing activity is fine.  This hurts your FICO score for too many cards showing usage.

Could someone clarify me? Wouldn't it be better to use all of your cards, to show them you use your credit responsibly? (of course low utilization, for instance 5% each)

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FICO "utilization" is not really utilization at all, since is not based on usage, but on reported balances.

It's true that it's better to have reported balances on 1/3 or less of your open revolving accounts.

Lenders can tell from your report that you've used the card in any given month, even when the reported balance is zero.

[GZG]

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@SouthJamaica wrote: Lenders can tell from your report that you've used the card in any given month, even when the reported balance is zero.

Does Cap1 not report this? I noticed they don't specifically have an "amount paid" section on their tradeline whereas the other cards I have do. Cap1 reports the historial highest balance, but not the amount paid every month.

[SouthJamaica]

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@GZG wrote:

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@SouthJamaica wrote: Lenders can tell from your report that you've used the card in any given month, even when the reported balance is zero.

Does Cap1 not report this? I noticed they don't specifically have an "amount paid" section on their tradeline whereas the other cards I have do. Cap1 reports the historial highest balance, but not the amount paid every month.

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I once was looking at a full credit report and noticed that there were about 3 different ways one could tell if there had been activity in each account that month.  It seemed pretty standard.

[Revelate]

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@SouthJamaica wrote:

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@GZG wrote:

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@SouthJamaica wrote: Lenders can tell from your report that you've used the card in any given month, even when the reported balance is zero.

Does Cap1 not report this? I noticed they don't specifically have an "amount paid" section on their tradeline whereas the other cards I have do. Cap1 reports the historial highest balance, but not the amount paid every month.

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I once was looking at a full credit report and noticed that there were about 3 different ways one could tell if there had been activity in each account that month.  It seemed pretty standard.

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I think that was on TU?

Other bureaus don't report the same way and not every creditor reports trended data.  It's becoming more common, but I doubt it'll happen in the next two years for everything.

[SouthJamaica]

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@Revelate wrote:

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@SouthJamaica wrote:

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@GZG wrote:

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@SouthJamaica wrote: Lenders can tell from your report that you've used the card in any given month, even when the reported balance is zero.

Does Cap1 not report this? I noticed they don't specifically have an "amount paid" section on their tradeline whereas the other cards I have do. Cap1 reports the historial highest balance, but not the amount paid every month.

---

I once was looking at a full credit report and noticed that there were about 3 different ways one could tell if there had been activity in each account that month.  It seemed pretty standard.

---

I think that was on TU?

Other bureaus don't report the same way and not every creditor reports trended data.  It's becoming more common, but I doubt it'll happen in the next two years for everything.

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I wasn't referring to trended data. Just to the fact that there are ways to tell from the full report if the account had activity that month.

[Kforce]

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@Fernando1 wrote:

I read in another topic this information, to improve your credit score:

• Utilization on less than 1/3 of open cards -- if you have 4-6 cards total, you want to show usage on only 1 of them.  If you have 7 or more cards, 2 cards showing activity is fine.  This hurts your FICO score for too many cards showing usage.

Could someone clarify me? Wouldn't it be better to use all of your cards, to show them you use your credit responsibly? (of course low utilization, for instance 5% each)

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"It is better to have reported balances on 1/3 or less of your open revolving accounts?"

As @SouthJamaica said:   Yes, as far as Fico scores are concerned.

"Wouldn't it be better to use all of your cards, to show them you use your credit responsibly?"

No, Fico scores don't like most cards reporting a balance.

As far as issuers liking it, have no idea.

If one puts $5,000 on a single card and pays it every month is

he/she less responsible than someone that uses 10 cards and puts

$500 on each?

Even if, I would not play the game

I believe you should use your cards how they benefit you.

My cards are not to impress other card issuers.

[mgood]

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@SouthJamaica wrote:FICO "utilization" is not really utilization at all, since is not based on usage, but on reported balances.

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I think that's something a lot of people don't understand. From the questions I see here, particularly from new members, people get confused on this. AZEO doesn't mean you only use one card (or less than 1/3 of your cards, or whichever standard you subscribe to). It just means that you pay off the balances before the statement date on all but one of your cards. And having one card showing a balance does not necessarily mean paying interest. Once the statement cuts, pay it by the due date, but pay the full balance, not just the minimum. You can use 80% or even 100% or sometimes more of your credit limit on a particular card and then pay it all off before the statement date and it will report $0 balance and 0% utilization.