If I want to be at 30% utilization do I want to have a 30% balance on all of my cards (5 of them)?, or do I just want the total amount I owe on all 5 of them to be at 30% of the total credit lines for all 5? Can my 30% be on the low rate cards and 0 balance on the high rate cards? I know this is what is best for my pocketbook, but which is better for my scores? Greg
It would make sense for them to sum and average. However, I would avoid having any balance over 50% on any card as that may set off a flag on its own. I have no facts to back that up, it's just a theory. I was weighing these choices myself recently and decided to pay off my $4k Nextcard balance completely because it was at 24%. Then I knocked my DMB and Aspire accounts down to 29%. Goal for year end is 14%. I am now waiting for these numbers to actually appear on my PG reports. A month later and they're just starting to show up.
I did this recently as I wanted to improve my score for a loan - I paid on line then "disputed" the balances with all 3 three CRA's - they all updated within a week and so did the score - I noticed some credit card issuers report two statements behind - Providian, Household....
I believe that utilization is an average of all the cards, however, like Dan said, if you have a really high utilization on one card, or even worse a card that's totally maxed out I think that will lower your score. I would think you would have to be way above 50% for a hit, but I don't know for sure. Also, I believe that there is some evidence that cards with a 0 balance don't count toward your utilization because the FICO system assumes cards with a 0 balance are closed (someone correct me if I'm wrong here). In general, I'd recommend trying to stay under 30% on average without letting any one card get way up and trying to keep at least a small balance on every card. HTH, Brett
I paid off $4400(5k limit) on providian last month because it was at 23.99%, it now has a zero balance, but my credit union visa has $4600 balance (6k limit) at 9.9%. Like I said in my earlier post it would be bad money management to move some of this balance at 9.9 to providian at 23.99, but would it be better for my scores to have 2 cards at 30% rather than 1 card at 75% utilization and one at 0%? Can making bad financial decisions actually help your scores?
It's not the smart money managers who the creditors make the big money from it's those with bad credit ratings and low scores who are the gravy for creditors. Scoring and reporting creates this clientele for them. THE END ** *** ** LB 59 """"```--~~~~~~~~~--```'""'''
Yes. FICO is not an indicator of how creditworthy you are, it's an indicator of how profitable AND trustworthy you are. There are many discussions around this elsewhere, but it definitely helps if you're more of a "mark". Keep a tiny balance on the high interest card. Charge a tank of gas on it once a month and pay it off. Make sure the timing is such that it gets reported. Typically, CC companies report the balance as seen on your bill. So, assume your balance was zero and you charged $1,000 that month. When you got the bill, you paid it off in full, and hopefully you paid no interest. My own experience has been that around two weeks later, that balance info dribbles onto your credit reports. So you show a small balance, pay no interest, and everyone's happy.
Not enough! More than a month later, I'm waiting for the lower balances to dribble on to my CR.. I've gone from $14k to $4k but not one CRA shows that yet. I'm concerned that it might take ANOTHER month for everything to balance out, but I'm showing $6.5k on two and $7.5k on EXP. I've seen a twenty point increase in my EQ fako, similar jumps in the other fakos. I'm not popping for the FICO until everything settles down, but I should see at least 20 points in the end. This one bit of hogwash in the score explanation section cracked me up - perhaps others will get a kick out of this also. Under negative factors: Credit usage : On average, you are using 42% of the credit limit on your credit card(s). Under positive factors: Credit usage : You are not using 70% (or more) of your credit limit on any revolving account. I wonder what sort of crack they're smoking when they come up with two different numbers for THE SAME CR and they become positive AND negative.
Re: Re: Utilization Question... Here is how Fico works: A bag of marbles represents the consumer. CRA 1 shows 25 red marbles in the bag. CRA 2 reports 25 blue marbles in the sack CRA 3 Says 25 Green marbles in the bag. FICO analyzes the information from all three of the CRAS and assigns a score of 75 to the sack made up of 25 each of red blue and green marbles. Upon opening the sack we find it contains 100 black marbles. Why was Fico unable to assign the correct score? you throw a dart at the bag and if you hit it you lose 50 points...if you miss the bag you lose 25 points...but if you don't even throw the dart at the bag and instead poke your finger you lose 100 points...
Re: Re: Utilization Question... My EX-CE score just went up 16 points as I paid off my Target VISA account. I still have a Provd. account that is almost maxed out. EX-CE is telling me that I have 66% of credit available. Btw, it took Target Visa 7 days from my statement closing to report to EX-CE. Current EX-CE score is 684 Best regards, Mirage
