Terry wrote:Until your utilization on each card is 30 percent or less and your score is 700+, you will find that most creditors will not approve any new applications at least with favorable terms and a decent credit line.
Here's a real world example (though it is still just anecdotal evidence):
Late last year I applied for a Slate to carry out some balance transfers. I don't recall my exact utilization but it was definitely over 60%. Chase would only approve me for a $2,000 limit and the highest APR in the range.
About 6 months later I was able to get my utilization down to under 10%. There were really no other changes aside from the lowered utilization and 6 months time. Chase then approved me for a $25K Mileageplus Explorer and a $25K CSP. The APR's on those cards are set but I've had other approvals as well and all of them have been at the lowest APR's in the ranges offered.
I'm not saying that these numbers are applicable to your credit. I'm just providing them as an example of how much of an impact utilization can have.
abc wrote:If my thinking is correct, then I should be able to increase my credit score just by reducing my credit utilization ratio. There are two ways of doing that: paying off balance (not an option for me at present), or getting a high limit credit card, no matter the terms
Correct on the first statement but I'd say that a high limit card isn't an option either though until you get your utilization down. You'll see improvements to your score as lowered balances report and you hit certain milestones.
Also, be aware that extremely high utilization can lead to adverse action. I've had credit limits dropped with high utilization.
abc wrote:Also, I wonder how credit utilization is calculated. Is it TotalBalance/TotalAvailableCredit? For instance, if I transfer $400 from Wells Fargo to my $500 Chase card, will it improve my utilization?
Both total and individual utilization are considered. In other words, if you have 10% overall but 80% on one card then the maxed out card will still have a negative impact.
abc wrote:Another question is, do multiple credit card applications lower your credit score instantly, or is it delayed, or are you allowed to shop around if it's all within a day or two?
Hard pulls have an immediate impact. Shopping around applies to things like mortgages, not credit cards. A lender may use a single pull if you apply for more than one of their credit cards at one time. If you're getting denials then you probably don't want to keep applying as you'll probably just continue to get denials and drop your score.
abc wrote: Am I right in that a high balance will improve my credit score? (Seems counterintuitive, but that's what online Valculators tell me!)
High limit helps. High balance does not. You seem to be aware of this but utilization is balance(s) / limit(s).
abc wrote:Last question, if a credit card says it reports me to the credit bureaus on Oct 3, does it mean my credit score changes on Oct 3rd, or is there a delay?
Bureaus don't instantly update and they don't all update with the same timeframe. TU seems to be slower from what I saw when I was monitoring such things.