What hurts more? Overall utilization or spread across lines?

[Anonymous]

I was trying a few variations of this question on the forum but I am not getting anything, and I am sure I cant be the only one that ever asked this.

Basically, we all know FICO looks at utilization on individual cards and at them all, and the question I am wondering is if someone has 10 cards say, and moves all debt or most of those to one single card, the overall utilization will remain and now one card has a lot, but many are low to nothing. I am thinking that the FICO would improve but not much, since there is a penality for multiple card balances, but I am not sure.

[Anonymous]

As  long as moving all balances to one card does not raise UT over the 28%, it should be fine. As overal shouldn't change at all.

But that is genrally unlikely, which is why people carry more than one balance to keep under that single card threshold. Not everyone has $40K CL's  on just one card to play with. Hence spreading it around. 

I don't think the score penalty from having "too many cards with a balance" is quite as damaging as the denial reason from a conservative Bank though. 

[Anonymous]

Well I mean, if it takes the one card utilization over the 28% threshold  is what I was meaning.

For instance. you have 2 cards with limits of 5000 each and have a balance of 1500 on them. If you moved the one balance to the other, raising it to 3000 while the other is zero, would that ding the fico more than just keeping them each at 1500.

[Shooting-For-800]

Every profile is different but I do not think it matters dramatically as long as cards are not maxed out.

I would think that anything below 50% would not really matter much.

8 cards at 48% would probably be better than 4 cards at 96%.

However, 8 cards at 48% is probably not much worse than 12 cards at 32%

[Girlzilla88]

It would be better to have 2 cards at 30% than to have 1 card at 60% for my 2 cents Lol    29% is where you would want them to be (or lower) so if you want to pay a little bit to each card to get them both to 29% or below that would look better on your profile

[Anonymous]

ah okay hm...

[Anonymous]

Right now you have an aggregate utilization of 30% and two cards with individual utilization at 30%. There are different theories but some theories hold individual utilization points are ascribed by the highest individual card utilization.

If so, taking 1 to 60%, which would cross the 49% threshold would probably result in a ding. But if you only have two cards you would also receive points from going from 100% of revolvers with a balance to 50% of revolvers with a balance. Your score change would be the net result. But you haven't given us your profile details so it's hard to speculate. We don't know if you have 2 cards or 10 cards.

@Girlzilla88 is right that paying down to 29% would offer you an aggregate point gain and potentially individual point gain, if you did it on both cards. 

Keep in mind fico scoring is designed to prevent you from getting a gain by moving around balances. For instance if your utilization on one card goes down and crosses one threshold but the other one goes up and crosses one threshold they could cancel each other out, depending.

And if it does go by the highest individual,  in your example, you would see a decrease because you would have one at twice as high utilization.

Actually that would be a great test if we can find out if it in fact goes by the highest or if each individual card plays a part. 

[SouthJamaica]

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@Anonymous wrote:

I was trying a few variations of this question on the forum but I am not getting anything, and I am sure I cant be the only one that ever asked this.

Basically, we all know FICO looks at utilization on individual cards and at them all, and the question I am wondering is if someone has 10 cards say, and moves all debt or most of those to one single card, the overall utilization will remain and now one card has a lot, but many are low to nothing. I am thinking that the FICO would improve but not much, since there is a penality for multiple card balances, but I am not sure.

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In FICO 8, if you have 10 cards with a balance or 1 card with a balance, the scoring difference in my profile hasn't been that great, but in the mortgage scores there is a significant difference.

In both scoring models, having any single card at > 29% will, in my opinion, get you penalized. And having multiple cards > 29% will get you penalized even more.

The reason I say 29%, and not 30%, is that (a) 30% is bad, not good, in that it will get you penalized, and (b) anything even slightly over 29% is susceptible to being rounded up to 30%.

[righthererightnow]

Always keep UTI low. Would be better to spread it around and make sure no one card went above 30%.

[Anonymous]

No, respectfully, the number is 29% as SJ said, not 30%.

As soon as one crosses 29%, s/he is penalized for an individual card, and one is penalized at over 9% aggregate, and even lower on some scorecards.