By Greg Fisher
January 27, 2014

There is more unsubstantiated, silly nonsense on the internet about personal finance.

Imagine that.

Here is some about credit scores. This is actually a 5-year follow-up on a creditscoring.com page (which, apparently, was ignored), "The So-Called 'Credit Utilization Ratio,' and Advice About It."

Credit Karma gets the link again

Recently, in an attempt at winning hearts and minds by improving American citizens' financial literacy, the esteemed bank Bank of America published a page and a video about the effect of credit card balances on credit scores. In its written summary, the organization recommends, "Look for a good credit score simulator online – like the one on CreditKarma.com."

In that summary, Bank of America also states, "Owing more than 30% of your available 'revolving' credit limit can have a negative impact."

That is true, but it is also true that owing more than 5, 10, and 20 percent could lower a score. In fact, it appears that merely owing more than zero has the same "impact." Fair Isaac, the FICO score company states, "This ratio basically looks at your total used credit in relation to your total available credit; the higher this ratio is, the more it can negatively affect your FICO score."

There aren't many credit score simulators around, so finding a "good" one as Bank of America suggests is pretty simple. One is from Fair Isaac who sees itself as all things credit-score and whose famous numbers are even mentioned by name by the federal government.

And, if the veracity of Credit Karma's documentation (despite its best intentions to eventually get the facts straight) is any indication of how good its simulator is, you might look elsewhere.

Charming contemporaries

A message, with a link to this page, to some of those mentioned here:

From: Greg Fisher [mailto:greg@creditscoring.com]
Sent: Monday, January 27, 2014 3:25 PM
To: Kenneth Lin, founder and CEO, Credit Karma; Jason Bushey, freelance journalist (via Money Talks News)
Cc: Stacy Johnson, CPA, executive producer, publisher, president, journalist, Money Talks News
Subject: credit score, utilization ratio under 30%, experts

Kenneth Lin, founder and CEO, Credit Karma
Jason Bushey, freelance journalist
cc: Stacy Johnson, CEO, Money Talks News

See "There is no such thing as credit karma."

Mr. Lin, your website states, "Experts recommend keeping your credit card utilization below 30 percent on each card and collectively."

Mr. Bushey, at Money Talks News, you wrote, "Some credit score experts will suggest maintaining a credit utilization ratio of less than 30 percent for each debt, while others suggest a 10 percent ratio is better."

What are the names of two experts who recommend a ratio under 30 percent?

--
Greg Fisher
The Credit Scoring Site
creditscoring.com
PO Box 342
Dayton, Ohio 45409-0342