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Credit Score Myth 4,, and Fair Isaac

Utterances of the myth that there is something significant about a so-called credit utilization ratio of 30 percent

| By Greg Fisher


Lansing / Dornhelm


Chen / Luthi  #n3438676
Esterow / Skowronski

Peck / Chaplin


In the internet domain, writer Leslie McFadden quotes Ethan Dornhelm, a credit score expert from Fair Isaac, the FICO score company. Dornhelm says, "There is some misconception out there that there's a hard and fast threshold above which the consumer will start hurting their score, below which it's helping the consumer's FICO score."

McFadden continues, "Dornhelm says a consumer's score takes the greatest blow as the person approaches 100 percent utilization, but could not offer an ideal threshold for consumers to heed."

Despite that, elsewhere, even itself states (circa March)

The basic rule of thumb is to keep your debt-to-credit utilization ratio collectively and on individual credit cards below 20 to 30 percent (the lower, the better). So if you get a new card, run up a bill well over that percentage and revolve a balance, your score is going to take a hit.

What's so special about 30 percent? Everybody and their mother (brother, aunts, uncles, grandparents and 5th cousins) say it, but nothing—no, nothing (until recently)—supported the notion. Myth 4 is only one of 22 credit score myths identified.

You can see a full spectrum of statements, from 99 to zero percent, at "The So-Called 'Credit Utilization Ratio,' and Advice About It," on (circa 2008).

Now comes Ben Luthi, a writer for Nerdwallet, a website, in the domain He writes, "'In general, your score falls when you use more than 30% of your available credit,' [consumer reporting agency TransUnion expert and "Accomplished Global Marketing Executive" Ken] Chaplin says."

Here we go again. #1507c

Fair Isaac, itself, doesn't help the pathetic situation with an anonymous writer linking to a repetition of Myth 4 by Nerdwallet (Luthi).

In social media, you never know when a relationship might end. @myfico follows @creditscoring, while, elsewhere in #CreditLand, @FICOWorld and @FICO block @creditscoring. Watch to see if the message gets through. Follow hashtag #1511F (referring to October, 2015, Fair Isaac). #FICOFriday

The Nerdwallet piece states, emphatically, in 13 simple words, "If canceling the card brings your ratio above 30%, your credit score may drop."

The tail wags the dog. #1511F

But, this month, things have changed: With TransUnion's Chaplin joining Fair Isaac's anonymous author, there are, now, two experts. #2experts

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