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I am currently at 42% utilization in overall revolving, credit card debt between three cards. My total credit lines equal $27K. I am looking to buy a house by the end of the year and I am working hard to reduce my overall utilization. The mortgage broker I am dealing with wants me to get all of my cards down to 50% utilization. That would put me at about 20% utilization overall.

Does the FICO scoring look at overall utilization or individual utilization? I can probably get two cards down to half, but not the third by this summer when I go for pre-approval. My credit scores are 680 TU, 650 EXP, and 640 EQ. The mortgage broker said he uses the middle score, so my EXP score would be used currently. I had a short sale in Nov 2012, so my score is probably lower than it should be.

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    Your current revolving debt is about $12k, aiming for 20% would be about $6k. – ChuckCottrill Jan 15 '14 at 23:47
  • not all lenders even look at the score, unless it is low. – CQM Jan 16 '14 at 2:50
  • @CQM: For a VA loan, you have to meet a minimum score that is why I am interested in particular – Brian Feb 4 '14 at 17:25
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My answer at How will going from 75% Credit Utilization to 0% Credit Utilization affect my credit score? offers a bit of detail, but the bottom line is that Utilization is aggregate. My $10,000 limit card is fine to push to $8K each month only because my other lines add up to quite a bit, so utilization is 10% or so.

I recommend you look at CreditKarma, they offer a score that tracks the scores you see, and it's updated weekly. A good tool, at no cost.

  • Thank you for your comments. CreditKarma makes note that a single account with a high utilization shows a risk to lenders. That's why I thought maybe it was individual vs aggregate. As I have been paying down my debt the past month, my score has improved by 10 points. I am at 40% utilization aggregate, from a high of 58% last month. The FICO change was immediate once I hit a certain threshold. So you are right, it is aggregate. – Brian Jan 28 '14 at 19:40
  • According to several different mortgage brokers, they tell me its the individual credit limits that matter, not the aggregate. Who is right? – Brian Apr 2 '14 at 16:58
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    My ego isn't so large that I'd blurt out "I am right." The truth is, there's are multiple scores, and it's very possible that one agency uses individual card utilization. I've not seen that, but that doesn't mean it can't happen. Someone reviewing your info for aa mortgage is welcome to apply their own criteria independent of credit score. So we may both be right. – JoeTaxpayer Apr 2 '14 at 19:14

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