What is the perrect utilization?

[BrutalBodyShots]

On what scorecards have you seen it reported that 5% aggregate utilization is a threshold point? I've never seen it personally and you haven't, so definitely not clean/thick/mature files, whether New Revolver or No New Revolver. I'd like to know where those data points are being seen. Maybe dirty files? I'd also circle back to raw dollars of debt on that front, as ~5% utilization on some files could naturally correlate with the first raw dollars threshold being arrived at. Since people typically don't look at the dollars (as was the case with SJ), they would assume utilization percentage.

[Thomas_Thumb]

There are numerous posts of young/thin files observing score drops around 5%. CassieCard was a prolific poster who provided personal data on this. Other posters have provided similar results in recent years. Thin and young may both play a role to increased sensitivity at low utilization levels. These profiles had relatively low aggregate CL so, unlike SJ, it appears doubtful aggregate balance thresholds played a role.

[BrutalBodyShots]

Understood, so young/thin. I'd tend to agree that raw dollars aren't a factor if we're isolating it to those scorecards. Those claiming it on a clean/thick/mature card though need to look at raw dollars. As for SJ, he doesn't even believe that defined utilization threshold points even exist in the first place based on a post he wrote in 2024.

What sort of data points have you seen (scoring impact) reported at 5% compared to what is typically seen at 10%? Does that initial threshold at 5% carry the same relative weight as the other threshold points, or is the 10% threshold more or less halved into two parts where ~half is seen at 5% and the other half at 10%?

[Realist]

You are speaking about a two part situation in regards to applying for a home mortagage.

1.  Your overall interest rate based upon a FICO score.  You want your utilization score on track for that calculation.

2. Your debt to income ratio.

Under 35%-45% in debt to income ratio, and the highest FICO score you can produce.  Your revolving utlization should be under 30% at worst.

An expansive and strong credit profile helps.  The more out of alignment from an ideal profile, the more someone will pay.  One does not simply do not walk into an excellent FICO score.  They earn it over a lifetime, or a very long time.

[Patient957]

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@BrutalBodyShots wrote:

I've identified raw dollar thresholds in the vacinity of $2k, $5k and $10k on my clean/thick/mature file. To your point, they are rather minor in terms of FICO scoring impact; 3-4 points typically. I just think it's an important metric to reference when talking optimized scores that it isn't just about utilization percentage... especially with higher TCL files. 

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Okay, so if I understand you, by this theory, I'm just over the 2K threshold, and should be able to gain a few points if I can knock $34 off my usage when my next credit card reports.  Do I have that right?

(Clean/thick/mature/new revolver, btw)

[BrutalBodyShots]

Not exactly, as the precise amount of $2k isn't confirmed. That's why I said in the vicinity of $2k, 5k and 10k. I allow my balances to report organically every month, so those are just values I've found that when crossed in either direction I've seen a change. A true test would be to report (say) $1999 one month and $2001 the next, but that would involve micromanagement that I'm not really after at this stage of the game.

But yeah, to loosely answer your question you may very well see a few points around that amount of raw dollars.