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Credit Score Myth 4: A 30% so-called utilization ratio

Some guy going on about 60 percent, now, too

| By Greg Fisher

TO: Priya Malani
FROM: Greg Fisher,
DATE: Wed, Feb 22, 2017 at 3:36 PM
SUBJECT: credit score, Nerdwallet, employers (Credit Score Myth 2), Myth 4, #1702a

In one hour, I'm running a story about you at [link to this page]. I was wondering if you would care to comment or explain.

Veracity check

You wrote, falsely, "And a good credit score is essential for everything from getting a job (yes, employers may look at your credit score before hiring you) to getting a mortgage." #Myth2

Employers do not use credit scores. I looked into it a long time ago. There are only 400 days until the anniversary of that.

I am bringing up that article of yours from October because, in a news search, I came across another in the same internet domain; I thought there might be some news in it. The writer of that one, dated this week, seems to think that a man from Nerdwallet knows what he is talking about.


Nerdwallet's website states, falsely, "Landlords, insurance agents and potential employers may also review your score – and you’re not borrowing money from them."

It also states, in contradiction

Actually, the employer won’t see your score — but it’s possible that someone will look at your credit report.

Confused? Here’s what’s happening:...

Credit Score Myth 4

In this week's article, regarding the so-called credit utilization ratio, the interviewee from Nerdwallet said: "Anything above 60% is really bad. Anything below 30% is healthy."

What is that guy talking about? What's so special about 30 (and now, 60) percent? Nothing I know. #Myth4

Imagine a reader whose only way to attend her grandfather's funeral is to use two thirds (OH MY STARS) of her credit card limit. The reader stays home because Grandpa would not have wanted her to ruin her credit on his behalf.

Think about it. Do you think that a credit score company would actually hard-code a sharp angle in the curve at 30%? And, if they did, why 30? Why not 25%? 35? People just throw in numbers to sound authoritative. It's the oldest trick in the expert book.

Even Fair Isaac (inexplicably) said 50: "There's no ideal utilization to shoot for, because as with most things, it depends on everything else on your report. But as a general rule, you want to try to keep your utilization on any one card, and across all of your credit cards, below 50% to avoid the risk of hurting your FICO score."

Further, Fair Isaac said, "There is no specific threshold when utilization begins to negatively impact a FICO score."

You can believe that I had nothing to do with that if you wish.

The last time I asked someone from Nerdwallet about the magic number (, I was directed to an article of theirs ( that (indeed) came about after I confronted its writer. #1507c

To justify his obsession with 30%, the writer uses not FICO scores (from credit score company Fair Isaac) to explain, but Vantagscore (from another credit score company).

So why the 30% rule? It’s likely because the recommendation to keep your credit utilization ratio low invariably prompts the question, “How low?” The 30% answer finds some backing from the credit bureau Experian.

Experian uses the VantageScore model, which is similar to the scoring model FICO uses. Consumers with good credit (or “prime” credit, using the VantageScore model) have a 30% credit utilization ratio on average. This seems to support the idea that maintaining a ratio of 30% isn’t a bad thing, and it could even be regarded as an upper limit to maintain good credit.

Who cares about Vantagescore?

In one of the most comical statements in all of credit scoring, the head of Vantagescore said (after the old 30 percent bromide), "And also, just don't borrow too much money, in general."

Let's move the conversation forward instead of rehashing the same, old points. What do you say?

You Follow me. That counts for something, doesn't it?


FOLLOW #1702a

What is the name of the top person of Refinery29?

Greg Fisher
Truth and Falsity
The Credit Scoring Site
PO Box 342
Dayton, Ohio 45409-0342
mobile/text 937-681-3224

Malani confirmed that she recieved the message above. #Myth2

Follow the activity of Item #1702a using that hashtag. #Myth4

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