Which utilization mix *on individual cards* is better for a higher credit score? Payoff question.

[Thomas_Thumb]

Fico compares individual revolving account utilizations to determine highest % based solely on balances and CLs. Utilizations are not age adjusted for scoring.

Any balance on a card be it $5, 8% or 28% that reports means that card will be included in the number of accounts and % of cards with balances. A change in number of accounts reporting certainly can affect score.

Fico looks at highest utilization % on any of your cards. So if 5 cards reported UTs of 8%, 12%, 12%, 24% and 26%; highest card UT is 26%. Dropping both 12% and the 24% card to 8% still leaves highest card at 26%. Score would not improve unless aggregate UT crosses a threshold. One identified aggregate UT threshold is going above 9% or dropping below 10%. (Fico assigns whole numbers to utilization and rounds numbers to the nearest integer).

Focus on taking cards to $0 not to bringing cards under 9%. The 9% threshold is primarily for aggregate utilization. All cards under 9% ensures aggregate is under 9%.

If the OP had a card at 45% then taking the 45% card down to 26% would likely impact score because highest card UT dropped to a lower UT tier. A threshold (29% or 30% depending on who is defining it) was crossed.

As discussed in other threads/posts, Fico classifies utilization in ranges or intervals. Each interval is assigned a different level of risk and scored accordingly. Utilization values within a given interval are classified as the same risk. Score changes when utilization value moves from one interval to the next.

Some examples of utilization intervals are:

Aggregate - [0,5], [6,9], [10,19], [20,29] or [0,9], [10,29]

Highest card - [0,9], [10,29], [30,49], [50,69], [70,89], [90,100] or [0,29], [30,49], [50,89] and [90,100]

[dax]

Thank you very much for your reply.

Sorry for the confusion.
=To clarify - none of my individual card utilizations have been over 28% in over a year.
=Overall Utilization went from 18% to 17% during this time
=Only change to my credit report was this card going from 0.00 to 28% but I had a different card I took to 0.00 - so I still had the same # of cards at 0.00 balance = 9.

I had a Wells Fargo prior that when I did a BT to 28% same thing happened. Same drop - 7pts. Next month I paid it back down to 15% and score rebounded 7pts. I never went over 15% again. Score stayed same.

Now with this new card I went to 28% and 7pt drop. Paid down to 9% - score did not rebound this time.

When this card was 0.00 - cards at 0.00 were 9. When this went to 28% I paid down another card at same time to 0.00 to keep 0.00 cards at 9.

==Q?==Do we know that balance on new cards vs balance on older card makes no difference?
No other changes to credit to make score drop 7pts.

Mortgage and car paid off 2021 so no bearing.  
Thanks again!

[Thomas_Thumb]

The data is interesting. Fico does look at aggregate balance in $ terms as well as utilization. The threshold values are unknown. Not sure how or if a BT event itself can affect score. There also may be lag time where debt shows in one account before the funds are credited in the other. Lag may depend on the specific accounts involved and the CRA.

[SouthJamaica]

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@dax wrote:

Thank you very much for taking the time to reply. I have taken your advice and now gotten these 10 cards to 0.00 0% and trying to get 3 more before the end of the month.
Quick Question. 2 of the cards that I paid off to zero hit me with interest. One $3 and another $12 interest. Experian showing them as "0% utilization" but show the balance.

Are these the same as Zero balance if I am trying to get 13 cards to be zero balance or should I ask these two to do a mid cycle update? (Both I immediately paid to 0.00 once the statement cut so they ARE 0.00 now but have to wait an entire month to report now )

Only ONE new card and ONE Hard Inquiry (SAME) in 24 months (actually 36 months) this card was taken out in September 2024

1	-	0.00%	-
2	-	0.00%	-
3	-	0.00%	-
4	-	0.00%	-
5	-	0.00%	-
6	-	0.00%	-
7	-	0.00%	-
8	-	0.00%	-
9	-	0.00%	-
10	-	0.00%	-
11	-	0.67%	-	0% APR
12	-	7.69%	-	0.00 01/22
13	-	8.69%	-	0.00 01/20
13	-	8.95%	-	NEW CARD 0%APR
15	-	9.72%	-	0.00 01/25
16	-	11.44%	-	2% APR
17	-	13.76%	-	NEXTto0.00 16%APR
18	-	26.00%	-	0% APR
19	-	26.50%	-	0% APR
20	-	27.22%	-	0% APR
21	-	27.37%	-	0% APR
22	-	27.52%	-	0% APR
23	-	27.98%	-	0% APR
24	-	27.98%	-	0% APR
25	-	28.00%	-	0% APR

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No they're not the same as zero. So if you want to get an account to zero you need to send in enough of a payment to cover any trailing interest that gets tacked on.

[dax]

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No they're not the same as zero. So if you want to get an account to zero you need to send in enough of a payment to cover any trailing interest that gets tacked on.

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Thank you. Unfortunately online you cannot overpay the balance nor can you overpay the balance by phone. I tried both.

I had to wait for the amounts to post before they could be paid. 

I have since paid both to 0.00 balance and plan to ask for a mid cycle update tomorrow.

[GZG]

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@dax wrote:

Thank you. Unfortunately online you can't overpay the balance not can you overpay by phone. I tried both.
I have since paid both to 0.00 balance and plan to ask for a mid cycle update tomorrow.

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you can push a payment from your bank for any amount that you want, for future reference, that helps when their own online systems won't let you push a payment for more than the amount on your card currently

[FicoMike0]

Thanks, @GZG 

That could be handy. 

[nycnite]

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@Thomas_Thumb wrote:

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Key areas of focus should be reducing % of cards with balances to 50% or less and reducing aggregate UT to under 9%.

Since you have 25 cards,  a 1st step might be reducing cards with a non zero balance reporting to 12. Start by paying off low balance cards that have higher apr%.

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Hi. Do I gather correctly from this conversation that there is a known threshold of  50% of total cards with a zero balance (greater than or equal to) at which one can expect a score bump?

Does this include all charge cards as well as credit cards?

Thanks!

[Thomas_Thumb]

Charge cards are credit cards. They just are not revolving accounts.

Yes, 50% of cards reporting balances is a threshold. My experience is going over 50% results in a score drop. Others have mentioned reaching 50% is the threshold vs going over it.

Note: Fico also looks at number of accounts with balances. That metric includes loans of all types in addition to cards. So, if someone has a few active student loans with balances, a car loan and possibly a debt consolidation or personal loan, Fico score can be penalized for"too many accounts with balances" even if only one card reports a balance.

VantageScore 4.0, by contrast, prefers to see a boatload of open installment accounts. It penalizes for:

1) Too few installment accounts recently paid as agreed.

2) Lack of recently reported student loans.

3) No open auto accounts on file.

4) No open real estate secured loans.