CS utilization question

Anonymous · ‎01-24-2010

I have looked through a lot of posts for this, but it's a big board. I have 10 CC with a utilization of 95% and will be paying off a substancial amount. Average account age is 14 years, so longevity isn't an issue and no lates on my FICO reports, so my only detractors are number of accounts and high utilization. A couple of questions: To get the best boost to my CS is it better to paydown $1000 each on ten cards or total payoff $10K on one card, or doesn't it make any difference. I won't be able to totally eliminate all my CC balances at this time, but with a better score I was hoping to get more low interest BT offers. I no longer get any on my higher interest cards which I am hoping to do some BT offers. Multiple cards (2 each) are held by the big players, Citi, BoA, WF, Discover & Cap1 because of other company buyouts in years past. My goal is to lower the overall interest on the remaining CC debt while I'm paying things off. I understand the two main types of payoff strategies and I don't have any inquiry issues either. With the current situation in the industry are the bigger players even offering low interest BT's to folks with higher scores? I have just signed up with the Scorewatch and pulled my FICO scores to work on this project. Are there any traps to watch out for, I know Citi and BoA have pulled dirty interest rate tricks on me in the past after they acquired lower rate cards from other companies and Citi just cancelled a smaller payed off account for non use.

newstart2010 · ‎01-24-2010

I believe that its the total percentage of utilization, not the individual cards. So I would suggest putting the bulk of the money towards the largest % rate cards so that your fees go down substantially.

I live my life like I type, fast and with a lot of mistakes.
Spacebar broken. Watch for finger.

02/04/2015 || TU 08: 728 EX 08: 709 EQ 08: 748

Anonymous · ‎01-24-2010

In order to really give you good advise, you may want to post the balance and limit for each card.

Typically, FICO wants to see your overall utilization between 1%-9%, with less than half your revolving accounts showing a balance. Even if you can't get the overall utilization down to 9% or under, just having lower utilization will help your scores. If you are able to completely payoff some of the cards, that would be my advise. But your overall utilization will be the same if you do that or if you pay $1,000 on each card. I would also look at where you pay the most interest and/or fees and try to pay them off or at least down so your future payments attack more principle.

ChesterPDexter · ‎01-24-2010

Would you mind telling us what your FICO score is like?

I'm curious because I'm in a similar situation with a few differences.

I have numerous cards, and have worked my way down from 68% or greater utilization to about 54% now (and I just paid off several accounts so when those are reflected, I expect it to drop into the low 40s or so.) In my case, I have completely paid some cards and I'm just chipping away at the others which are each charged up to 90-something percent of their limits.

I do have too many inquiries, though - but no lates unless one in 2006 on an installment loan is counted, and two paid tax liens from 3 years ago and a BK from 2003. My score is something like 670.

_________________________________________________________
Too many accounts; too many debts; lots of open credit, and lots of utilized credit. Scores somewhere in the 600s - I have no earthly idea exactly what number, but not 700 like it was, briefly.

creditwherecreditisdue · ‎01-24-2010

@newstart2010 wrote:
I believe that its the total percentage of utilization, not the individual cards. So I would suggest putting the bulk of the money towards the largest % rate cards so that your fees go down substantially.

This is not correct. Both individual account UTIL and total UTIL matter. It would be best to get the UTIL on the individual cards under 35% and then kill them off from there one by one.

newstart2010 · ‎01-24-2010

@creditwherecreditisdue wrote:
@newstart2010 wrote:
I believe that its the total percentage of utilization, not the individual cards. So I would suggest putting the bulk of the money towards the largest % rate cards so that your fees go down substantially.

This is not correct. Both individual account UTIL and total UTIL matter. It would be best to get the UTIL on the individual cards under 35% and then kill them off from there one by one.

Awesome, thank you for correcting me. That is good information to have. Thanks!!!

I live my life like I type, fast and with a lot of mistakes.
Spacebar broken. Watch for finger.

02/04/2015 || TU 08: 728 EX 08: 709 EQ 08: 748

Anonymous · ‎01-24-2010

Quote "Would you mind telling us what your FICO score is like?

I'm curious because I'm in a similar situation with a few differences."

FICO from this site as of 1/24 TU 722 Equifax 696

Anonymous · ‎01-24-2010

@newstart2010 wrote:
@creditwherecreditisdue wrote:
@newstart2010 wrote:
I believe that its the total percentage of utilization, not the individual cards. So I would suggest putting the bulk of the money towards the largest % rate cards so that your fees go down substantially.

This is not correct. Both individual account UTIL and total UTIL matter. It would be best to get the UTIL on the individual cards under 35% and then kill them off from there one by one.
Awesome, thank you for correcting me. That is good information to have. Thanks!!!

Also number of accounts with a balance is part of the equation. So total util, plus individual util, plus number of balances, plus total amount of dollar debt, all contributes to the score.

creditwherecreditisdue · ‎01-24-2010

The only part of that I'm not too sold on is the total amount of dollar debt. I'm pretty sure FICO only evaluates percentages/ratios. I don't think it matters if you owe 10% of $10K in total CL's or 10% of $100K in total CL's. Vantage scoring would probably like the second scenario better...

Anonymous · ‎01-24-2010

@creditwherecreditisdue wrote:
The only part of that I'm not too sold on is the total amount of dollar debt. I'm pretty sure FICO only evaluates percentages/ratios. I don't think it matters if you owe 10% of $10K in total CL's or 10% of $100K in total CL's. Vantage scoring would probably like the second scenario better...

FICO does care about total dollar amount. As the total dollar amount goes up, regardless of percentage, it has an impact on FICO. FICO High Achievers have an average (revolving) debt balance of less than $1200. Therefore, if you have $200,000 in CL's and $18,000 in balances, while your utilization will be fine....your debt amount will be less than optimal.

If you care to use the FICO Estimator to run simulations with various amounts of debt combined with the percentage (you can specify the dollar amount and the percentage) you can see the effect.

(fico estimator link in my sig line)