utilization scoring

[treschic]

i have a question regarding utilization and scoring.  i have 6 cc, all of which were maxed out. i was making the minimum payments, until i could pay them all off ( i know never max out and keep the balance at 1-9%). anyways, i have to move, and the apartment complex has told me the minimum score that i have to have to be approved.  so, i'm trying to raise my score, so that i can be approved.  do to only making the minimum payments, 4 of the cards were reporting over limit balances.  i have paid 4 of the 6 down to <10% utilization. my question is, as far as scoring, does it take the total amount of utilization or individual. for example, will i still be penalized for having 2 cc with 90% utilization, or will the scoring look at the average utilization of all 6 (i hope i'm being clear). also, how much are you penalized score wise for being over limit? my score plumited over the past 6 months due to 2 new accounts, and my cc's having high utilization, and i need to increase my score.

[Anonymous]

Hi angie. The model will look at both aspects. It will look at your overall and individual account usage. The score ding has already taken place on your usage of revolving credit and  2 cc's, however lets say if your balance were to increase from those 2 cc's...then you might get further dinged. At this point, I think it can only improve from where you are at right now. I remember last year when I went near my limit my card,  I lost about 100 points. And later when I went over the limit, I lost another 24 points. So just continue what your doing and pay down those 2 cc's and you will be in good shape. But keep in mind though, credit requirements varies from apartments to apartment. I think it would be foolish if an apartment were to base their decision on a just a score. I know for a fact though that apartments that require credit checks pays close attention to lates, chargeoffs, collections, and public record. Good luck and keep us updated!

[RobertEG]

I agree with Chops advice..

Under %util, FICO looks at two factors, both of equal weight. These two,togehther, are 35% of FICO.

1. Overall % util of all revolving util

2. Utilizational of individual cards (each card, and percent of all cards showing monthy balances)

If you can get overall %util to 80%, and the same for each CC, then I see no reason for rental refusal based on current debt.

But, if you had prior delinquencies, this shows them that you, under circustanstances that they dont care about, that you have shown a history of not paying debt.

I know that will be tough, and many rental agents will accept less, but the worst thing you can have is a card tthat is over the limit,  It tells them that you are willing to default on credit terms.  That is hardly an incentive for them to extend faith in further payments to them.

Being over limit is a major FICO derog. 

Get all cards under 100%, as a first step.

Message Edited by RobertEG on 12-22-2008 03:43 AM