@Anonymous wrote:Hello!
My husband has 3 Revolving accounts:
Zales Store Card: 1893/2650
Capital One Card: 2455/3000
Bank Line of Credit: 480/500
Right now his utilization is 71%, 82% and 90%
My thought process was to bring the Bank line of credit down to the 27% threshhold (cause that's the easy one) and the other two to around 47%. Or, do you think I should concentrate on getting one of the larger ones to 27% while leaving the other hover at 71% or 80% for awhile? My loan officer advised me that getting it down to 4% would be great...but the score difference would only be marginal, so that's why I'm going for 27%.
Also, I'm having a hard time telling if the Bank line of credit (overdraft protection) is affecting CC utilization.
Thanks!
I think that's the right idea
I have an overdraft line of credit; it doesn't report anywhere. Just look at his credit report, and if it's not there, it's not there.
1) The utilization on ANY $500 CL shouldn't even be in question, it's too easy to much pay that small amount down...get that one down
it's too easy to pay the couple 100 bucks.....No offense but a $500 LOC is basically just a fancy overdraft line, pay it and be done with it.
As how it reports, you need to look CLOSELY, b/c some vendors will report the TL under 'other' ....which is fine but ppl mistake that, since
it isn't listed with the other revolvers, that it's not affecting the debt/ratio......
The easiest and most reliable way to find out ..how the scoring model is 'seeing' that tradeline is to pay attention to what amount is listed as
yout TOTAL AVAILABLE CREDIT ( like on CK etc.) and what % is being used for calculating his debt/raio
Ex: IF his AVAILABLE credit = $6150 then it's includec as a revolver if it's $5650, then it appears that $500 isn't being reported as a revolving account.
2) The statement ...."but the score difference would only be marginal" bothers me but is TYPICAL of loan officers...ie a salesperson babysitting a commission
(*Now, I've got NOTHING against commissioned salespeople, been one for years) but we have to understand that many times their knowledge base and SINGLE FOCUSED objective may cloud/color how they see the world. I'm going overboard, in being nice with how I say this b/c most r/e, loan or auto ppl are truly TRYING to 'help' to the best of their ability....but their focus is on QUALIFYING, period.
Not necessarily the BEST situation but the least amount of 'trouble' to his/her deal way to GET IT DONE...and a statement like
"but the score difference would only be marginal" screams just do the minimum so my commission gets paid (and I understand getting paid) their focus isn't and understandably can't be the very best interest of said clients...it's always gonna be the least resistence way the get things done w/o jeopardizing THEIR money.
These ppl tend to have a M.A.S.H. unit thought process to 'repairing credit' vs the best hospital in the area mindset ....yes the medic can save your life on the battlefield but you may lose a leg that would have been saved by a different mindset......LO's and Car dealers mindset is that of a battlefield medic STOP THE BLEEDING and that's where their knowledge base and understanding ENDS in many cases, just to be fair and to understand WHY...many times their advice can be shortsighted and factually loose. (Again, no offense they have to know their PRIMARY business better and a 'liitle' credit stuff in order to get their primary business done...it's not an indictment it's just what it is. A hotel runs a shuttle to the airport to support their business but they aren't really 'in' that business the bus comes when, it comes and Larry drives...that's as far as the hotel staff goes knowledge wise vs a limo/taxi company)
3) That being said most ppl would NOT agree that the score difference between dropping from a blended 81% to 27% vs 81% to 4% would be referred to as 'marginal'...
What's marginally different is probably the difference between the LO selling 'this' loan product vs not selling one at all.....
So it really comes down to the ultimate objective...some ppl JUST want to 'qualify' to leave with a car/home/loan and others want the VERY BEST terms they can get, so
they are going to want to manipulate the scoring model to be preceived as, as LOW of a RISK as possible which = a better score...and the TRUTH is 4% debt load is a LOT less risky than a profile carrying a 27% debt load.,...
it's just math and common sense
27% is almost 700% more indebt than 4%
Again, there is a difference between ppl whose mindset is 'Are we approved?'
and those who think 'What's the BEST you can do, for me?'
I been both, and I like the latter
It may be a minor pooint but I dislike ppl getting the wrong idea by someone 'in the business' that becomes that person's 'education' on how things work and the importance of this or that credit wise....so many pl are TOLD lots of 'part-truths' during the r/e process that stick b/c the 'agent/LO' said so...again may be a well-meaning person but their level of expertise many times is very narrowly focused ( and again I 'get' it they have little reason to be more versed their only trying to GET IT DONE....same as the war-zone doc whose just trying to get you home
Once you start getting them down, you'll want to get them down even more. This only leads to a good outcome!
