Utilization question.

[Anonymous]

I was recently approved for an Uber $2500 CL and I want to spend more to take advantage of the rewards.
Last month my utilization was 11% which increased my score. I pay off my bill every month the second I receive a statement.
If I increase my credit limit somewhere closer to 25% but always staying under 30%, will this decrease my FICO?

Thank you

[Anonymous]

Higher utilization won't increase your scores.  If your FICO increased at 11% reported then that tells me your other balances on other cards are at 0%.  That or the Uber card is your only revolving account.  I believe you got a FICO boost because you get points for "actively using credit".  You'll get score penalized for having all of your revolving accounts report a 0 balance.

[Anonymous]

To be clear, I also have a capital one platinum with a $1000 limit. Last month I just had a lower utilization than normal of 11% but my normal usage would typically be around 15-20% to be safe. What I am asking if I have a month where I have lower utilization and then the next month I have higher utilization but still under 30%, is this going to cause my score to go down?

[Anonymous]

I apologize I worded my first post poorly.

[Anonymous]

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@Anonymous wrote:
To be clear, I also have a capital one platinum with a $1000 limit. Last month I just had a lower utilization than normal of 11% but my normal usage would typically be around 15-20% to be safe. What I am asking if I have a month where I have lower utilization and then the next month I have higher utilization but still under 30%, is this going to cause my score to go down?

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Your total utilization across all cards and your highest individual utilization on a single card are considered by FICO.  Ideally you want your total UTI across all cards to report no greater than 8.9%(but not zero).  You can go up to 28.9% on a single card without any major scoring penalties.  

So with your 2 cards, the total balances should be no higher than $311.50 that you let report.   8.9% of your Uber is $222.50 and your Capital One is $89.  If your Capital One is at 0 then you could let the Uber report the full $311.50 instead of $222.50.  

So here in fantasy land if I was trying to shave every last point with what I have:

Cap One at 0% and Uber at $222.50 or below but not 0

Uber at 0% and Cap One at $89 or below but not 0

[Thomas_Thumb]

I believe there is an individual card utilization threshold at 29%. If you cross above that, a point drop may be realized. So, stay under 29% not 29.2% or 30%. For aggregate (overall) utilization there are thresholds at 9% , 29% and higher levels.

If your aggregate and highest individual utilizations stay in the above 9% to below 29% range score may not be affected differently. Of course, # and/or % of cards reporting balances is a scoring factor as well. Reporting non zero balances on fewer cards may boost score slightly depending on profile and CRA.

[Anonymous]

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I believe there is an individual card utilization threshold at 29%.

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I and several others based on recent data believe the first threshold to exist at 9% for individual card utilization, the same as aggregate utilization.  The adverse scoring impact is minimal, though, in most cases only 2 points.

[Anonymous]

Have we tested this on all three bureaus?  As BBS knows, the FICO 8 algorithm differs in how each bureau implements it.

Thus it is conceivable that even if you guys were to test and retest and retest this at EX (multiple people getting the same results) it would not follow that the same thing happens at EQ or TU.

Curious to hear more.  Also nice reminder that even if there is a point loss it appears to be so tiny that it wouldn't matter to most people.  Of course, it might matter to a person applying for a mortgage (say) but such a person should be implementing AZEO (with a small balance on the one card) which would naturally take care of it.

[Thomas_Thumb]

Agreed,

Responses should be framed based on what the OP is looking for - in the above case impact on score accociated with utilization from around 15% per card increasing to 30% on one card. 

I continue to advise managing utilization under 29% on a per card basis and under 9% in aggregate as a standard practice. For me a meaningful score change is 5 points or more so I use that criteria for general advise.

[Anonymous]

I personally think anything under 10 points is insignificant, which is why I referenced 2 points as being extremely minor.  Good questions regarding TU and EQ, as I'm unaware if a 2 point ding would be seen with either of those bureau data.