takeshi wrote:Of course you don't have to. Some just prefer to eke out as much they can. Such people tend to frequent credit discussion forums.
You're basically saying the same thing as the usual recommendation. Prolonged high utilization can lead to adverse action. Short term high utilization is not an issue.
"High" isn't just the 95% in your example (which would be maxed).
I think there is a difference in what we're each saying but it leads to the same result.
Some folks on here are consumed with what their FICO is that day. They fret over which card they should charge a pack of gum to in order to get their FICO from 703 to 704 (absurd example). They worry that if they apply for a credit card that they're FICO may drop 10 points temporarily. They won't close old, unused cards because they fear that'll change their overall utilization and it'll ding them on their FICO.
If it's your hobby to do that, then there's nothing wrong with that. There are the FICO rules in place which you can apply to your life and consider before each and every purchase and before opening or closing any card. You can literally think each day, "Will doing this thing make my FICO go up or will it make it go down?"
My take on it is: You don't need to fret about this. Be patient and be responsible and it'll pretty much fall into place. New and better cards will come along and you'll get them as needed. Older cards will go unused and you can just close them. You really don't need to be concerned with every move you make if you just act in a responsible manner. You don't have to hold onto that Sears card that you haven't used in 7 years because closing it would decrease your overall credit available and increase your utilization. Just close it and get on with life.
My example for tires was just a suggestion on an idea of how to use the card as something where he's showing he's paying something off to the bank without going into debt for dumb things.
I'd argue, too, to what end are you fretting about maximizing your FICO? If you're just being responsible, it's going to be high, anyway. You're going to get that lower interest credit card and home loan or whatever.
Yes, if you max out every credit card you get and go and apply for more, then you look risky. Your FICO will reflect that, sure, but you know you're risky. It's not a secret. You don't need to look at your FICO to tell you that. It reflects that.
You shouldn't need a low FICO score to tell you that you're unestablished or stupid. You should be a able to figure that bit out on your own. Conversely, you shouldn't need a FICO score to tell you that you're responsible as you're already living that way. It may be a nice curiosity but it shouldn't tell you anything you don't already know. All it really does is tell the banks: They're unestablished, irresponsible, or responsible, to some degree or another.