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What percentage or Credit Card limit & is it per card

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Frustrated
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Subject: What percentage or Credit Card limit & is it per card
 
Posted on Sat Sep 15, 2007 8:07 pm  

I have 2 Questions.

1) I understand the I should keep my credit card usage to 25% or less of my total card limit, is that correct?

2) If I have multiple cards is that factored in, meaning if I have 2 Cards with a 1000 limit do I need to not use more than 250 on each card OR can I use 500 on ONE card?

Thanks
cajunbulldog

cajunbulldog

Joined: 30 Aug 2007
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Location: Louisiana


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Posted on Sat Sep 15, 2007 8:36 pm  

You are talking about utilization. Keep it below 25% on each card and it is actually better below 10% on each card.
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Posted on Sat Sep 15, 2007 8:55 pm  

Okay, 10% but I was told less than 20-25% actually hurts my score?

But it is based on each card that is good to know.
cajunbulldog

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Posted on Sun Sep 16, 2007 12:34 pm  

Fico states utilization below 30% on each account and overall is a good factor for a person.
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Posted on Sun Sep 16, 2007 1:20 pm  

Okay, but say I have a card with a 1K limit I should not charge more than $300, but supposed I purchase and item for $500 and pay it off right away or pay off half of it right away does that count against me? And by right away I mean as soon as it posts.
CreditGrantor

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Posted on Sun Sep 16, 2007 1:34 pm  

If you charge $500 and pay it off right away, then they wouldn't even have a chance to report to the bureaus that you have a $500 balance - they would be reporting your new statement amount, which includes the payment you made.

There is a spot on the tradeline that shows "High Credit" - which is the largest balance you ever had on the account. I'm not sure how FICO considers that. In my eyes, it would be a good thing to show that you were able to pay off a $500 charge.
CreditGrantor

CreditGrantor

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Posted on Sun Sep 16, 2007 1:49 pm  

Another thing to consider is that your credit report/score is like a "snapshot" at that particular point in time ...

If you are not trying to get new credit this month or next month, then go ahead and charge it. Take a few months to pay it off. (Your score may drop a few points, but if you're not applying anywhere then it doesn't matter). After a few months, you will get your balance back down below the 30% threshold, and your score will go back up. Then, by the time anyone else looks at your credit, they will get a "new picture" and your $500 charge won't be affecting it.

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