Utilization?

[Maya12]

Good Morning,

Could someone explain utilization to me, and please, explain it to me like I am 2 yr old.

I am new the lingo.

Thanks.

[shawnette]

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Maya12 wrote:

Good Morning,

Could someone explain utilization to me, and please, explain it to me like I am 2 yr old.

I am new the lingo.

Thanks.

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You have $10,000 total available credit.  You are using $2,500.  Your utilization (the amount you are using) is 25%.  You take the total amount of available credit you have and divide it by the total amount you are using and that's what your utilization is.

[Anonymous]

The experts say keep your utility @ 1-9% for good scoring...

[Mn_Vikes]

The numbers are right but the wording is backwards.  Should read:

You take the total amount you are using and divide it by the total amount of available credit you have

                              $2,500 / $10,000 = .25    or   25%

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shawnette wrote:

You have $10,000 total available credit.  You are using $2,500.  Your utilization (the amount you are using) is 25%.  You take the total amount of available credit you have and divide it by the total amount you are using and that's what your utilization is.

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[Anonymous]

fico scoring looks at individual card utilization as well as overall utilization.

100k available credit w/one 20k card maxed out = 20% overall utilization, but 100% utilization on 1 card.

that 1 maxed out card can hurt as much as a collection account for scoring purposes.

[Anonymous]

Hi Maya12!!!

For even more information, you might also want to take a look at Tuscani's Credit Scoring 101 thread.  You can find it here--

http://ficoforums.myfico.com/fico/board/message?board.id=ficoscoring&thread.id=2654

[shawnette]

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Mn_Vikes wrote:

The numbers are right but the wording is backwards.  Should read:

You take the total amount you are using and divide it by the total amount of available credit you have

                              $2,500 / $10,000 = .25    or   25%

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shawnette wrote:

You have $10,000 total available credit.  You are using $2,500.  Your utilization (the amount you are using) is 25%.  You take the total amount of available credit you have and divide it by the total amount you are using and that's what your utilization is.

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Oops!  That's what happens when you're up all night with an asthmatic 3yo with a cold. 

[haulingthescoreup]

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@shawnette wrote:

Oops! That's what happens when you're up all night with an asthmatic 3yo with a cold.

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Been there, done that, got the T-shirt! Hope he's feeling better. (I'm trying to remember from another thread, but I think that your 3-year-old is a boy. If not, my apologies to your daughter. )