utilization PER card - or across all cards?

[Anonymous]

Thanks to all the advice on this board I'm up from 530 to 730 fico (equifax) since May of last year - HOORAY!  Now I've got some open accounts and I'm working on utilization.  My question is:  Do lenders view utilization as all total balances divided by all total credit limits, or is the utilization of each cc calculated individually?

I now have 3 open credit Cards:

• Wells Fargo Platinum Visa @ $11,500 cl (I got a secured card and deposited $10k over the course of the year - then they graduated it and bumped my cl $1500 after about 15 months)
• Discover More Cashback Bonus @ $4k cl
• Citi Platinum Select Mastercard @ $2600 cl

Both the Discover and Citi cards have great 0% APR intro's, including balance transfers, so I was considering transferring some or all of my current $2500 balance from the Visa to these two - but I don't want to mess up my utilization numbers.  That said - does a $2500 balance spread out across all 3 cards equate to 14% utilization (2500/18100) or would having, for example, 2000 on the discover equate to 50% utilization for that card, and raise my risk level?

[Anonymous]

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@Anonymous wrote:

Thanks to all the advice on this board I'm up from 530 to 730 fico (equifax) since May of last year - HOORAY!  Now I've got some open accounts and I'm working on utilization.  My question is:  Do lenders view utilization as all total balances divided by all total credit limits, or is the utilization of each cc calculated individually?

I now have 3 open credit Cards:

• @Anonymous Fargo Platinum Visa @ $11,500 cl (I got a secured card and deposited $10k over the course of the year - then they graduated it and bumped my cl $1500 after about 15 months)
• @discover More Cashback Bonus @ $4k cl
• @Anonymous Platinum Select Mastercard @ $2600 cl

Both the Discover and Citi cards have great 0% APR intro's, including balance transfers, so I was considering transferring some or all of my current $2500 balance from the Visa to these two - but I don't want to mess up my utilization numbers.  That said - does a $2500 balance spread out across all 3 cards equate to 14% utilization (2500/18100) or would having, for example, 2000 on the discover equate to 50% utilization for that card, and raise my risk level?

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UTIL is based on individual UTIL and total UTIL.

[Anonymous]

Hi knockin,

Wow!  That's impressive score growth!!

FICO scores you on both individual utilization and combined utilization.   

In addition, your creditors will soft you and a high utilization on even one card raises a red flag.

Since your Visa is at about 22% utilization, I would probably leave the balance there.  But some more mathematically inclined souls may recommend something different to take advantage of those great 0% interest offers.  As soon as you can, you'll probably see a bump when you get the balance below 19%.  Part of the picture is how long you're planning on carrying that balance and what the interest rate is on WF.  However, I wouldn't put more than 9% utilization on either the Discover or the Citi - that limits the amount you might want to transfer over.

FICO also watches number of accounts with balances, so the general recommendation is to report a balance on only one - more accounts with balances may yield a bit of a FICO score hit.

[Anonymous]

great info beam - thanks!  My thought was to transfer amounts equal to 8 or 9% to each card, then pay down the remainder on WF to around 8% as well - but realizing that multiple balances could hurt is good to know.

[vanillabean]

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@Anonymous wrote:

My thought was to transfer amounts equal to 8 or 9% to each card, then pay down the remainder on WF to around 8% as well - but realizing that multiple balances could hurt is good to know.

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It's hard to tell what works best at that particular point. Liz Weston said this the other day. "Getting your balances below 30% of the credit limit on each card can really help; getting balances below 10% is even better. Though most debt gurus recommend paying off the highest-rate card first, a better strategy here is to pay down the cards that are closest to their limits."

[MattH]

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@Anonymous-own-fico wrote:

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@Anonymous wrote:

My thought was to transfer amounts equal to 8 or 9% to each card, then pay down the remainder on WF to around 8% as well - but realizing that multiple balances could hurt is good to know.

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It's hard to tell what works best at that particular point. Liz Weston said this the other day. "Getting your balances below 30% of the credit limit on each card can really help; getting balances below 10% is even better. Though most debt gurus recommend paying off the highest-rate card first, a better strategy here is to pay down the cards that are closest to their limits."

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Yes, Liz Weston is one of the more-clueful personal finance writers around.  She understands FICO scoring, and she realizes little stuff like expensive Starbucks treats won't make a material difference if somebody has too much car or too much house for their income level.