What are the Utilization “Checkpoints?”

[Wizard10]

Thanks thanks so no penalty for having a single card at 8.9% since it’s within the threshold? It’s all a bit confusing in the early days of rebuilding but this site is extremely helpful.

[Thomas_Thumb]

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@Wizard10 wrote:

When you say individual uti is under 30% you mean one single card? So would it be bad to have a secured card with 200 max limit report 8.9% uti at statement date? Or should I always make single cards hover at 28%?

I’m trying to maximize and want to make sure I have all the best practices down. 

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If you have a secured card with a $200 limit, best to keep its reported balance under 29% (under $58). You could charge considerably more on the card each month but, that would entail multiple monthly payments to stay below 29% for the reported statement balance. If you have multiple cards, it is generally advantageous to have a subset of cards report a zero balance. 

It is best to keep aggregate utilization below 9%. Of course, if you only have one card then individual card utilization = aggregate utilization. In this case you would need to keep card utilization under 9% to keep aggregate utilization under 9%. You don't want all cards (or your only card) to report a $0 balance because that triggers a 15 to 20 point penalty associated with "no recent activity on revolving accounts".

My advise for those with one low limit card is too not worry about the 9% UT level. Staying under 29% will be just fine for building credit history. Once you get more cards/higher credit limits then put some focus on the 9% threshold.

A clean, thin, file with just a couple revolving accounts between 2 and 3 years age can score in the 760 to 780 range on Fico 8. This can be achieved with an aggregate utilization hovering in the 9% to 29% range as long as highest card UT stays below 49%.

[Wizard10]

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@Thomas_Thumb wrote:

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@Wizard10 wrote:

When you say individual uti is under 30% you mean one single card? So would it be bad to have a secured card with 200 max limit report 8.9% uti at statement date? Or should I always make single cards hover at 28%?

I’m trying to maximize and want to make sure I have all the best practices down. 

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If you have a secured card with a $200 limit, best to keep its reported balance under 29% (under $58). You could charge considerably more on the card each month but, that would entail multiple monthly payments to stay below 29% for the reported statement balance. If you have multiple cards, it is generally advantageous to have a subset of cards report a zero balance. 

It is best to keep aggregate utilization below 9%. Of course, if you only have one card then individual card utilization = aggregate utilization. In this case you would need to keep card utilization under 9% to keep aggregate utilization under 9%. You don't want all cards (or your only card) to report a $0 balance because that triggers a 15 to 20 point penalty associated with "no recent activity on revolving accounts".

My advise for those with one low limit card is too not worry about the 9% UT level. Staying under 29% will be just fine for building credit history. Once you get more cards/higher credit limits then put some focus on the 9% threshold.

A clean, thin, file with just a couple revolving accounts between 2 and 3 years age can score in the 760 to 780 range on Fico 8. This can be achieved with an aggregate utilization hovering in the 9% to 29% range as long as highest card UT stays below 49%.

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Thanks for the wealth of knowledge. To be a bit more specific I have 4 cards 2 of my own and AU on 2. 1,300 between all cards I normally keep all under 30 but have been learning a lot here so now I’ll do even lower. One card is a credit one card which will most likely be the card I always leave at 0.