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Is credit utilization looked by card or total credit?

Say I have three credit cards with the following utilizations:

Card A
Limit: $30000
Balance: $25000
Utilization: 83%

Card B
Limit: $20000
Balance: $5000
Utilization: 25%

Card C
Limit: $20000
Balance: $2000
Utilization: 10%

Total credit across all cards is $70,000. Utilization across all cards is 47%. Will my overall credit/FICO be hurt by the one card with 83% or is it looked at in total, where I have a much lower 47% utilization?

  • Both are taken into account. Both numbers (83 & 47 ) are also too high & will reduce your score. – VBCPP Sep 15 '14 at 23:07
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Your utilization is MORE hurt by your total utilization, your credit score is drastically lower than it could be because of this.

You want to get your total utilization under 10% (or under 30% or under 15%, different sources will say different things, truth is that lenders can adjust their risk models at their discretion)

High utilization of any one card or line of credit would be a lesser factor, where one could further optimize their credit score and perceived credit worthiness by lowering the utilization on a single card well below a percentage threshold.

  • While I can't comment on the overall utilization number as I've never run it high I have multiple times pushed one card into those realms--and it translates to about a 10 point drop (admittedly on a FAKO score rather than the real thing.) Pay it off and the points come right back. – Loren Pechtel Sep 16 '14 at 0:43
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Sources quote different percentages (30%, 20% and 10%) as desirable for better credit score. But the most reliable sources indicate that < 10% (total utilization) is the goal for the best credit score. When they are specific, all sources agree that utilization is based upon total outstanding to total limit (aggregate, rather than separate).

A better question to ask yourself is why would you want to carry a large amount of debt on credit cards? Even a low interest rate (10%) will still cost you over $300/month in interest. Consider that paying off your debt would be like earning that amount, tax free.

1

The number I always hear from Clark Howard is 30%. You might want to set up an account with Credit Karma they will tell you what you can do to get your credit score higher.

And it is total utilization like was mentioned earlier.

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High utilization on two of my credit cards dropped my credit score by 40 points! Paying them down to 45% raised my credit back up 40%, having under 30% raised my credit 30 more points, they are equally important.

I'm not a pro, I'm just speaking from direct experience, what better than to get a suggestion from someone who has actually experienced it. To many systems have different ways of calculating debt, having over 50% utilization on your CCs is the first fix, the second is lowering your debt over all. Of course if you’re looking at fixing your credit over a long period of time and not worried about raising your credit score quickly than you would choose to pay down the cards with the highest APRs first and than lower the debt ratio on cards with low APRs. The answer to your question depends on if your working in general to reduce debt or attempting to raise your credit for a loan offer or buying a house etc.

Also as a heads up if you go to apply for a loan somewhere ask who their lenders are, call the lenders first and ask how they calculate for lending. I wish we would have done this before we applied for an RV loan and were denied. We could have corrected a few things first before applying. Now all other lenders just see a denial and run for the hills. Of course no one would tell us this because why do they really care about our credit score, they just want ya in and out, you either qualify or get out of their hair! (Denied on a $14,000 dollar RV loan with ½ down and credit score of 730 because I was previously denied by a lender because of a discrepancy on one of my reports). I fixed it and three months later with fairly good credit I was still denied because the two lenders saw the denials and ran for the hills.

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