What Using 50% of your Credit Limit Does to Your Credit Score

We look at what using 50% of the credit limit on ONE CARD did to my credit score, and its not pretty.
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[ianespinosa]

$200 secured card was bumped up to $300. I spent all $300 and paid back early, in one shot my score dropped 151 POINTS! Even when I pay early every month down to zero.

[drjsantosable]

I went from 15% to 55% credit utilization and my credit score dropped from 770 to 650.

[SpencerJohnsonOfficial]

This just goes to show how important credit utilization is! Luckily, that's really easy to fix... it's just important to be cognizant of it!! Thanks for your experiment Ben 😉

[lianalonge]

Thanks so much for sharing another experiment!

My overall CU stays less than 1%, although I did just recently make a large purchase totaling $4, 787 on my $0 balance Amex BCP $30K SL which brought my CU to 15.96%! 😅 I paid it down immediately to $1K with CU as 3.33% just to report to the credit bureaus this time around, and will pay it off soon.

[viksra]

It should be noted that the majority of banks rely on FICO 8, but banks and other lenders will soon be adopting FICO 10 which tracks your utilization over time, so if you have a high balance right now, you should try to get it down before they begin relying on data from FICO 10.

[alexc]

I lost about 30 points on my VantageScore, going from 700 to 670 by maxing out one card with a measly 580 limit. My portfolio has 37k in total limits, and somehow 500 bucks made that much of a difference 😑 The distribution of your utilization really matters.

[dvante]

I saw you at the airport this Wednesday I didn’t get a chance to say hi cause I was on the X-ray but I glad see you made to your destination safely

[TraderDT]

I had a similar experience with Bk of America card. I had 50% Utilization reported on my $500 ($250), tho my overall utilization was 6%. My score dropped by 11 points.I paid that $250 balance down to $9. I'm expecting to re-capture those points when the new balance is reported.

[boondoggle]

Recently, I went above 30% utilization on one of my cards and took a 4 point hit for it, which isn’t terrible, but I’d imagine that it gets exponentially worse you use a much higher amount of your credit.

[ceciliaruns]

Thanks for taking the hit so we don't have to!! 😀

[JC-phvr]

Went on a vacation around Thanksgiving then of course did some Black Friday shopping. Couldn't pay it down fast enough before it reported. Only 3 to 5 day window. LOL.. went from 6% utilization to 40% utilization and lost 22 points 🤦🏻‍♂️ we'll get it back next month though ✌🏻🤟🏻👊🏻

[ExposeFlyersDotCom]

That sucks, I hate that we have to be extra extra extra extra careful all the time.

[mynextpair]

I went from 21% to 87% credit utilization on one card and my credit dropped from 715 to 642.

[notnef]

Where can one check those other fico scores?

[Lifeissorich.]

I was given a baby $1000 limit on a card and I ran it up because of the sign up bonus. Score dropped more than 40 points for a month before paying it off.

[Carsia]

The crazy part is I’m doing this same thing. I closed on a house exactly a month ago, so my score dropped. I got the BCE for the bonus and to get a new couch… I already have the money for, so I’m going to let the 50% utilization report. I’ll pay it off afterwards, but it’s also going to bring my average age down. I’m on a “tank my credit score” kind of thing right now. Lol. It was in the 800’s, so it shouldn’t get into the poor territory.

[todd]

I paid all my cards off on accident because I returned something expensive that I already paid the bill on and it hit my credit score for 12 points. Crazy how things work. Pay your bills off and it hurts you.

[ItsMeCJ]

This was a cool experiment. I guess in theory, this system would “help” us from getting into more debt by signaling to banks that they should maybe hold back on extending any loans or credit to a customer who’s getting into too much debt.

[michaelshay]

if you let a card report high utilization do it with a chase card the report again when you pay balance to 0

[stevencarrier]

Did I miss something in the video? Is the utilization based on total or just per card?! I was under the impression that it’s your total usage divided by the total available credit.