MemberSince99 wrote:I'm like you guys obviously haven't spent much time on MyFICO where spending over 4% is a huge red flag and maxed-out to them. Even here I've seen posts saying 30% is "huge" utilization.
Personally I'm starting to think the whole thing is kind of a farce. First why give you credit they are uncomfortable with you using? Not sure how that makes sense
It's all about risk analysis. The utilization aversion on myFICO doesn't mean that utilization doesn't matter. I and plenty of others have experienced AA due to high utilization. I still have a USAA card that was dropped to $3,600 and has yet to recover even though the notoriously conservative PenFed granted me a $30K CL since then.
MemberSince99 wrote:Secondly, carrying a balance long term is totally different than paying them once a month when the bill comes but for scoring purposes these are treated the same way.
...and that's really the key. It's not just utilization but high utilization over time with low payments. In other words, the creditors aren't looking at individual data points but trends. Daily updates would provide more granularity but they'd still be looking for trends.
As always, one has to consider the source. myFICO users tend to farm, obsess over utilization at all times, and keep every possible account open. There are varying styles when it comes to managing one's credit.