Hello guys.. I was just wondering about this post from 2019
The known thresholds are 8.9%, 28.9%, 48.9%, 68.9%, and 88.9% (maxed). Actually, that's simplifying things a bit. Exactly 9% should be OK, but you'd hate to miscalculate by a penny or two and have 9.0000001% turn into 10% for scoring purposes. 
28.9% is considered "reponsible" borrowing, and it generally puts one in the second best scoring tier. If cards that report positive balances are at 28.9% or below, your report will look good.
"The general wisdom is that overall utilization of 8.9% or below, individual card utilization of 28.9% or below, and a single card reporting a balance will optimize the revolving portion of one's score. Individual card utilization is determined by the card with the highest utilization.
Some have reported being dinged at less than 8.9%/28.9%, though, and we haven't really pinpointed why.
That's why we recommend AZEO (a single card reporting a tiny positive balance) when one needs every possible point and hasn't done the testing to see how his profile reacts to balances."
I am looking to update myself on these since I am getting ready for applying for new cards and my ficos are high, but you know how it is.. I want to be even more sure I will get the cards I need.
Any advise is much appreciated.
the ideal? applicant typically has one card with an extremely small amount reporting with all of their other cards reporting $0
regardless of the score implications, the actual amount of debt you owe is likely a consideration
if you have 100k in credit, and 8k reporting and make $30k a year, it's cool that it's "less than 10%" but that's an extremely large amount of debt for the income level
@Superduper2014 wrote:Hello guys.. I was just wondering about this post from 2019
The known thresholds are 8.9%, 28.9%, 48.9%, 68.9%, and 88.9% (maxed). Actually, that's simplifying things a bit. Exactly 9% should be OK, but you'd hate to miscalculate by a penny or two and have 9.0000001% turn into 10% for scoring purposes.
28.9% is considered "reponsible" borrowing, and it generally puts one in the second best scoring tier. If cards that report positive balances are at 28.9% or below, your report will look good.
"The general wisdom is that overall utilization of 8.9% or below, individual card utilization of 28.9% or below, and a single card reporting a balance will optimize the revolving portion of one's score. Individual card utilization is determined by the card with the highest utilization.
Some have reported being dinged at less than 8.9%/28.9%, though, and we haven't really pinpointed why.
That's why we recommend AZEO (a single card reporting a tiny positive balance) when one needs every possible point and hasn't done the testing to see how his profile reacts to balances."
I am looking to update myself on these since I am getting ready for applying for new cards and my ficos are high, but you know how it is.. I want to be even more sure I will get the cards I need.
Any advise is much appreciated.
Fico penalizes for too many cards reporting balances and for no recent revolving activity.
The penalty for no recent revolving activity is often 20 points. So, make sure the card reporting is a revolving credit card - not an AMEX charge card and not an AU card. Preferrably not a store card either unless it is cobranded as a Visa/Mastercard.
The penalty for 2 cards reporting nominal balances vs 1 is typically 0 to 5 points max. So, don't fret about the possibility of 2 cards reporting.
You really should test your own profile. I don't subscribe to AZEO or trivial balance $5 reporting. If you must try AZEO, keeping the reported card utilization under 9% is sufficient.
Test it.
P.S. Fico does mention it looks at aggregate amount owed in absolute terms but, it has minimal weight. A few with higher aggregate CLs have tried to tease out $ amount thresholds. I speculated a low end threshold might exist around $6k based on my data but, other things started coming into play.
@Superduper2014 wrote:Thank you guys..
I will be experimenting.
I have overall credit util of 7%,
I currently have 3 cards under 29%,
1 at 9%
1 at 3%.
I am able to pay down to zero the 9% and 3% and bring one of the 29% down to 9%.
At that point i'd have:
2 at 29%
1 at 9%
My fico 9s are:
Experian 783
Equifax 818
Transunion 792
Not sure why there are discrepancies here on the ficos, but they have they same exact info.
In any case.
This means from wha has been said here that
1) 29% owing on one card and 8.9% owing in the aggregate, FICO would treat it more harshly than someone who owes, for example, $500.
In this case I would still not be in such great shape if I still have 2 cards at 29%, even if I pay the other smaller ones.
2) Fico penalizes for too many cards reporting balances and for no recent revolving activity. Or all cards a $0 Balance. Activity is ok. Just pay them before the statement cuts. Get your rewards.
In this case it would benefit me to pay off 2 cards completely as I would not be penalized for too many cards with balances.
I am trying to allocate my resources correctly for maximum score upgrade in the next 2 weeks. (totally possible due to my reporting dates on these cards) Max score would be AZEO. 1 card reports around 6%. The rest report $0 balance.
Any suggestions appreciated!!!! thank you thank you
Good Luck in 2 weeks.
@Superduper2014 wrote:Hello guys.. I was just wondering about this post from 2019
The known thresholds are 8.9%, 28.9%, 48.9%, 68.9%, and 88.9% (maxed). Actually, that's simplifying things a bit. Exactly 9% should be OK, but you'd hate to miscalculate by a penny or two and have 9.0000001% turn into 10% for scoring purposes.
28.9% is considered "reponsible" borrowing, and it generally puts one in the second best scoring tier. If cards that report positive balances are at 28.9% or below, your report will look good.
"The general wisdom is that overall utilization of 8.9% or below, individual card utilization of 28.9% or below, and a single card reporting a balance will optimize the revolving portion of one's score. Individual card utilization is determined by the card with the highest utilization.
Some have reported being dinged at less than 8.9%/28.9%, though, and we haven't really pinpointed why.
That's why we recommend AZEO (a single card reporting a tiny positive balance) when one needs every possible point and hasn't done the testing to see how his profile reacts to balances."
I am looking to update myself on these since I am getting ready for applying for new cards and my ficos are high, but you know how it is.. I want to be even more sure I will get the cards I need.
Any advise is much appreciated.
I don't agree that these thresholds are meaningful. Plus it depends on what metric you're talking about, and what you mean by "threshold". When I talk about a threshold I mean a line of demarcation, where there is a significant difference between being above or below the line, and the difference is markedly different than what it would be with more gradual changes.
If you're talking about individual revolving account utilization, I consider 28% and 48% thresholds.
If you're talking about aggregate revolving account utilization, I don't believe there are any thresholds. The lower the better; the higher the worse.
If you're talking about aggregate instalment loan utilization, I consider 9% a major threshold.
If you're talking about individual instalment loan account utilization, I don't believe there are any thresholds.
@Superduper2014 wrote:Thank you for your insight on this.
I am trying to focus on my goal. Which is applying to a couple of cards.
I guess for that, creditors will look at the score and also other variables of their own interest.
In this context, you believe that leaving the cards I currently have at 28% instead of bringing a couple down to 8.9% would yield same results for approvals?
No I don't. I was talking only about the existence of FICO score thresholds. And actually I was talking only about FICO 8 score thresholds.
It will always improve your chances for approval, and almost always increase your scores, to reduce your revolving utilization.
E.g. Let's say your aggregate revolving utilization is 15%, and you reduce it to 5%. Have you crossed any "threshold" (as I have defined the term)? Not in my opinion. But have you increased your scores? Yes. Probably significantly. And have you increased your chances of approval? Yes. In that scenario, reducing your utilization would be major.
And if you couldn't reduce it to 5%, but could reduce it to 12%... Have you crossed a "threshold"? No. But have you helped your scores and approval odds? Yes.
Just because you haven't crossed a "threshold" doesn't mean you haven't improved your scores. Reducing utilization always helps.