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Experian on 30 percent, the credit utilization ratio magic number

Audio of Experian spokesman on 30%, 10%, very high, very low, rule of-thumb and ultimate goal for credit card balance to-limit ratios, and closing accounts

| By Greg Fisher

See March 4.

After a message from creditscoring.com, Consumerist (Consumer Reports) made a striking correction. #1503b

If that ratio goes higher than 30%, it’s negatively impacting your score. So someone with $1,000 in debt and $10,000 in credit isn’t hurting themselves, but if that same person only has $3,000 in credit, their credit score is worse for it.

[CORRECTION: We did not mean to imply in the above paragraph that a 30% ratio is a definitive dividing line between improving or harming your credit score. The goal should always be to have the lowest debt-to-credit ratio.]



Subsequent message:

From: Greg Fisher [mailto:greg@truthandfalsity.com]
Sent: Friday, March 06, 2015 3:07 AM
To: Moira Vahey, spokesperson, U.S. Consumer Financial Protection Bureau
Cc: Adam Levin, chairman, cofounder and expert, Credit.com; Rob Berger, Dough Roller; Melissa Valentino, Consumer Reports; Sam Gilford, spokesperson, U.S. Consumer Financial Protection Bureau; Walter Suskind, press assistant, U.S. Consumer Financial Protection Bureau
Subject: RE: Credit Score Myth 4, Consumer Reports

Consumer Reports made a correction.

Please reply today.

--
Greg Fisher
Truth and Falsity
truthandfalsity.com
PO Box 342
Dayton, Ohio 45409-0342


Berger replied that he interviewed Maxine Sweet of Experian. #Myth4


From: Greg Fisher [mailto:greg@truthandfalsity.com]
Sent: Friday, March 06, 2015 12:58 PM
To: Gerry Tschopp, senior vice president, Public Affairs, U.S., Experian
Cc: Rob Berger, Dough Roller
Subject: RE: Credit Score Myth 4, Consumer Reports, Experian

Mr. Tschopp, forward this to Maxine Sweet, please. What is her email address?

On credit.com, Rob Berger wrote, "If that ratio exceeds 30%, it can have a negative impact on your credit score."

Ms. Sweet, you said: "As for "The Magic Number," it used to be, you know, to keep it below 30 percent, and I still think that's a good rule of-thumb, especially for young people just starting out because they're not going to have very high limits. But, as you mature and get more cards and higher limits, ideal credit scores will be down below 10 percent, even, utilization. So, that should be an ultimate goal." [28:39]

What was magic about 30 percent, and what is so special about 10 percent?

--
Greg Fisher
Truth and Falsity
truthandfalsity.com
PO Box 342
Dayton, Ohio 45409-0342
937-681-3224
skype fisher100