Credit Advice and Tips on Credit Utilization

Submitted by sara on Sat, 10/03/2009 - 17:10

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1. If you pay off before the closign then it will be refelcted at all. Once the statement closes thats what is reported to the bureas

2. In general it accross allcards,but if you use 100% on oen card and 105 on other card then it will surely affect yoru score. Best thins i to utialize them equally

3. Mortgae is more like a long terme loan but a credit card is more and unsecured revolign credit. Since the card is unsecured it ismore risky

Sun, 10/04/2009 - 01:37 Permalink

All of your questions refer to credit scoring and specifically to credit utilization. I'll try to directly answer your questions to the best of my knowledge, and then get some general advice on credit scoring.


Utilization is measured at the close date (typically monthly) and then reported to the bureaus. A reporting period is typically 90 days, so a charge and then quick payoff should not hurt your credit utilization.


FICO measures utilization at the individual card level (and possibly in aggregate) but be aware that if you have an individual credit line or credit card that has a balance that is more than 33% of the credit limit, this could negatively impact you. If you have a maxed out card, this will certainly hurt you.


There is no concept of utilization on an installment loan or primary mortgage, that we are aware of. If you payoff credit lines or credit cards by refinancing your mortgage, this could likely benefit your utilization ratios, since the cards are paid to zero and their utilization is low. Also, in terms of payment history, a mortgage has the most weighting so remaining current with your mortgage payments will continue to help your credit score.

Sun, 10/04/2009 - 12:41 Permalink

As you are inquiring about credit scores let me give you some information on how it is calculated. It is important to understand how your credit score is calculated. Your credit rating is calculated based on several variables, including:

1) Payment history, which counts for approximately 35% of your score, is the most heavily weighted factor used in calculating your credit score. Consistently paying your bills on time has a positive influence on your score, while late or missed payments will hurt you in this area. If you have delinquent payments, the older the delinquency the less the negative impact on your score will be. Collection accounts and bankruptcy filings are also taken into consideration when analyzing your payment history.

2) Total debt and total available credit, which counts for about 30%. This section looks at how much debt you have compared to the total available credit on your accounts. If all of your accounts are maxed out, you will be considered a poor credit risk, because it appears that you are struggling to pay off the debt you have already incurred. If your account balances are relatively low compared to your available credit, this part of the risk analysis should help your overall credit score. The score calculation also looks at these two factors independently. Having too much available credit, whether you have used it or not, could hurt your credit score, as statistical studies have shown that people with excessive amounts of available credit are a higher credit risk. Unfortunately the bureaus do not define exactly what they consider excessive, so best tip is to use credit conservatively and to keep your debt to credit limit ratio low.

3) Length of positive credit history, which counts for about 15%. The longer you maintain accounts in good standing, the better your score will be. This shows that you are able to make a long-term commitment to a creditor and are consistently responsible about making your payments. If you have accounts with long history (5 or more years) and no missed payments, you should keep these open and paid off.

4) Mix of types of credit, which counts for approximately 10%. Having several different types of credit, such a credit cards, consumer loans, and secured debt, will have a positive influence on your credit score. Having too much of one type of credit can have a negative impact.

5) The number of new credit applications you have recently completed, which accounts for about 10% of your score. Applying for too much new credit in a short time period makes indicates that you could be credit risk, as you may be desperately trying to keep your head above water. The models make an exception for people who are shopping around for a loan, so if you are simply applying to see who can give you the best rate on a new loan, you need not worry too much about damaging your credit score.

Sun, 10/04/2009 - 12:44 Permalink


Your credit score and report is based on the following

35% is based on payment history
30% Amount you owed
15% length of history
10% New credit
10% on types of credit

As you can see 35% is payment history, as you keep making payment on time , it will help you to improve the score quickly and the next 30% is how much you owed. As you keep making payment it will reduce the amoutn you owed helping again to improve your score and report.

15% is length of credit history, which i assume you have pretty good history.

Do nto worry about the other two until you have decent score.

But for sure it will take some time to come to a decent number.

Do not apply for any new credit. If you have credit cards, make monthly payments on time. Use cash for some timeif possible.

But the firts two thigns will be your key to get back on track.

Sun, 10/04/2009 - 18:09 Permalink
Mad (not verified)

The company chkces your credit and it also companies that check your credit and the company chkces your credit score you can check your score.For credit and the company chkces your score and it also companies that check your score and it will affect it will affect the score and the score without you can check your score anytime you authorizing it will not affect your score anytime you can check your credit and it also companies that check your score without you apply for credit.

Sun, 04/14/2013 - 16:23 Permalink