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Maximizing FICO Score while saving on interest (UPDATED)

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Jlu
Established Contributor

Maximizing FICO Score while saving on interest (UPDATED)

Hey guys, need some advice from you pros.

 

Currently have 3 balances on 3 different accounts:

Barclaycard: $2100 (0% til this summer)

Walmart: $400 (0% til later this year)

CSP: $3500 (15.24% APR)

Total debt: $6000

 

It's got my utilization at ~20%.

 

I have a BT offer to transfer up to $5000 to my Discover More @ 0% for 12 months. Would it kill my score to pay $1000 off and take the leftover $5000 and completely max the Discover card? It would mean ALL my revolving accounts would be reporting a $0 balance except for 1 maxed out Discover reporting > 90% utilization on that single card.

 

What do you all think? Regardless I'm going to transfer the CSP to the Discover because of the APR.. but I figured I'd roll in most of the Barclays and pay off the rest.

 

Thoughts?

 

AMEX BCP $35k | Citi Double Cash $30k | PenFed PlatRewards $25k | Barclaycard $40k | Chase Freedom $25k | BofA Cash Rewards $40K | US Bank Cash+ $4500 | Discover IT $25k | NASA Platinum-Advantage $40k | CapOne Quicksilver $15k | Amazon Card $10k | Ten years on myFICO from 510 to 780 scores
Message 1 of 13
12 REPLIES 12
indiolatino61
Valued Contributor

Re: Maximizing FICO Score while saving on interest


@Jlu wrote:

Hey guys, need some advice from you pros.

 

Currently have 3 balances on 3 different accounts:

Barclaycard: $2100 (0% til this summer)

Walmart: $400 (0% til later this year)

CSP: $3500 (15.24% APR)

Total debt: $6000

 

It's got my utilization at ~20%.

 

@I have a BT offer to transfer up to $5000 to my Discover More @ 0% for 12 months. Would it kill my score to pay $1000 off and take the leftover $5000 and completely max the Discover card? It would mean ALL my revolving accounts would be reporting a $0 balance except for 1 maxed out Discover reporting > 90% utilization on that single card.

 

What do you all think? Regardless I'm going to transfer the CSP to the Discover because of the APR.. but I figured I'd roll in most of the Barclays and pay off the rest.

 

Thoughts?

 


I believe that maxing out any card will temporarily hurt your score until the balance is paid down. Now, whether maxing out one card is better or worse for your FICO score than showing multiple cards with a balance is a YMMV sort of question. The only way to see how different parameters affect you personally is to try it out. For me, I got to 800 TU by having all my cards report $0, and one card report 8%. When I let it report 9%, my TU would not break 800. The best of luck to you.

 photo Logo - Credit Card Collection - Data Inclusive_zpskiw5xfjj.jpg photo emerald_zpsfitcxbh5.jpg
Message 2 of 13
longtime_lurker
Valued Contributor

Re: Maximizing FICO Score while saving on interest


@indiolatino61 wrote:

@Jlu wrote:

Hey guys, need some advice from you pros.

 

Currently have 3 balances on 3 different accounts:

Barclaycard: $2100 (0% til this summer)

Walmart: $400 (0% til later this year)

CSP: $3500 (15.24% APR)

Total debt: $6000

 

It's got my utilization at ~20%.

 

@I have a BT offer to transfer up to $5000 to my Discover More @ 0% for 12 months. Would it kill my score to pay $1000 off and take the leftover $5000 and completely max the Discover card? It would mean ALL my revolving accounts would be reporting a $0 balance except for 1 maxed out Discover reporting > 90% utilization on that single card.

 

What do you all think? Regardless I'm going to transfer the CSP to the Discover because of the APR.. but I figured I'd roll in most of the Barclays and pay off the rest.

 

Thoughts?

 


I believe that maxing out any card will temporarily hurt your score until the balance is paid down. Now, whether maxing out one card is better or worse for your FICO score than showing multiple cards with a balance is a YMMV sort of question. The only way to see how different parameters affect you personally is to try it out. For me, I got to 800 TU by having all my cards report $0, and one card report 8%. When I let it report 9%, my TU would not break 800. The best of luck to you.


Personally, I'd always go with the route that saves the most in interest, as FICO has no memory, and unless you're apping for something big in the near future, I'd say it's more valuable to go ahead and save the interest money!

 

Just my .02 though

Current cards: MSUFCU Platinum, Amex PRG, Amex Surpass, Amex BCE, Citi Prestige, Citi Double Cash, Citi Premier, US Bank Cash +, Huntington Voice, AAviator, Sallie Mae, Discover IT, Chase Freedom TU:753 EQ Enhanced: 758
Message 3 of 13
indiolatino61
Valued Contributor

Re: Maximizing FICO Score while saving on interest


@longtime_lurker wrote:

@indiolatino61 wrote:

@Jlu wrote:

Hey guys, need some advice from you pros.

 

Currently have 3 balances on 3 different accounts:

Barclaycard: $2100 (0% til this summer)

Walmart: $400 (0% til later this year)

CSP: $3500 (15.24% APR)

Total debt: $6000

 

It's got my utilization at ~20%.

 

@I have a BT offer to transfer up to $5000 to my Discover More @ 0% for 12 months. Would it kill my score to pay $1000 off and take the leftover $5000 and completely max the Discover card? It would mean ALL my revolving accounts would be reporting a $0 balance except for 1 maxed out Discover reporting > 90% utilization on that single card.

 

What do you all think? Regardless I'm going to transfer the CSP to the Discover because of the APR.. but I figured I'd roll in most of the Barclays and pay off the rest.

 

Thoughts?

 


I believe that maxing out any card will temporarily hurt your score until the balance is paid down. Now, whether maxing out one card is better or worse for your FICO score than showing multiple cards with a balance is a YMMV sort of question. The only way to see how different parameters affect you personally is to try it out. For me, I got to 800 TU by having all my cards report $0, and one card report 8%. When I let it report 9%, my TU would not break 800. The best of luck to you.


Personally, I'd always go with the route that saves the most in interest, as FICO has no memory, and unless you're apping for something big in the near future, I'd say it's more valuable to go ahead and save the interest money!

 

Just my .02 though


Oh...I totally agree that saving interest is the better route, but the OP was asking about FICO scoring also...which of course, as you point out, is only important when applying for new credit/HP CLI's.

 photo Logo - Credit Card Collection - Data Inclusive_zpskiw5xfjj.jpg photo emerald_zpsfitcxbh5.jpg
Message 4 of 13
MMB85
Contributor

Re: Maximizing FICO Score while saving on interest


@longtime_lurker wrote:

@indiolatino61 wrote:

@Jlu wrote:

Hey guys, need some advice from you pros.

 

Currently have 3 balances on 3 different accounts:

Barclaycard: $2100 (0% til this summer)

Walmart: $400 (0% til later this year)

CSP: $3500 (15.24% APR)

Total debt: $6000

 

It's got my utilization at ~20%.

 

@I have a BT offer to transfer up to $5000 to my Discover More @ 0% for 12 months. Would it kill my score to pay $1000 off and take the leftover $5000 and completely max the Discover card? It would mean ALL my revolving accounts would be reporting a $0 balance except for 1 maxed out Discover reporting > 90% utilization on that single card.

 

What do you all think? Regardless I'm going to transfer the CSP to the Discover because of the APR.. but I figured I'd roll in most of the Barclays and pay off the rest.

 

Thoughts?

 


I believe that maxing out any card will temporarily hurt your score until the balance is paid down. Now, whether maxing out one card is better or worse for your FICO score than showing multiple cards with a balance is a YMMV sort of question. The only way to see how different parameters affect you personally is to try it out. For me, I got to 800 TU by having all my cards report $0, and one card report 8%. When I let it report 9%, my TU would not break 800. The best of luck to you.


Personally, I'd always go with the route that saves the most in interest, as FICO has no memory, and unless you're apping for something big in the near future, I'd say it's more valuable to go ahead and save the interest money!

 

Just my .02 though


You don't get charged interest by having a balance reported. So, interest is completely irrelevant when talking about maximizing your FICO by having a balance reported.  But, you of course have to make sure to pay it in full shortly after the statement cuts and the balance is reported. 

 

Message 5 of 13
longtime_lurker
Valued Contributor

Re: Maximizing FICO Score while saving on interest


@MMB85 wrote:

@longtime_lurker wrote:

@indiolatino61 wrote:

@Jlu wrote:

Hey guys, need some advice from you pros.

 

Currently have 3 balances on 3 different accounts:

Barclaycard: $2100 (0% til this summer)

Walmart: $400 (0% til later this year)

CSP: $3500 (15.24% APR)

Total debt: $6000

 

It's got my utilization at ~20%.

 

@I have a BT offer to transfer up to $5000 to my Discover More @ 0% for 12 months. Would it kill my score to pay $1000 off and take the leftover $5000 and completely max the Discover card? It would mean ALL my revolving accounts would be reporting a $0 balance except for 1 maxed out Discover reporting > 90% utilization on that single card.

 

What do you all think? Regardless I'm going to transfer the CSP to the Discover because of the APR.. but I figured I'd roll in most of the Barclays and pay off the rest.

 

Thoughts?

 


I believe that maxing out any card will temporarily hurt your score until the balance is paid down. Now, whether maxing out one card is better or worse for your FICO score than showing multiple cards with a balance is a YMMV sort of question. The only way to see how different parameters affect you personally is to try it out. For me, I got to 800 TU by having all my cards report $0, and one card report 8%. When I let it report 9%, my TU would not break 800. The best of luck to you.


Personally, I'd always go with the route that saves the most in interest, as FICO has no memory, and unless you're apping for something big in the near future, I'd say it's more valuable to go ahead and save the interest money!

 

Just my .02 though


You don't get charged interest by having a balance reported. So, interest is completely irrelevant when talking about maximizing your FICO by having a balance reported.  But, you of course have to make sure to pay it in full shortly after the statement cuts and the balance is reported. 

 


I understand, but he is talking about rolling a balance each month I believe, because otherwise it wouldn't matter the interest rates on the cards.

Current cards: MSUFCU Platinum, Amex PRG, Amex Surpass, Amex BCE, Citi Prestige, Citi Double Cash, Citi Premier, US Bank Cash +, Huntington Voice, AAviator, Sallie Mae, Discover IT, Chase Freedom TU:753 EQ Enhanced: 758
Message 6 of 13
MMB85
Contributor

Re: Maximizing FICO Score while saving on interest


@longtime_lurker wrote:

@MMB85 wrote:

@longtime_lurker wrote:

@indiolatino61 wrote:

@Jlu wrote:

Hey guys, need some advice from you pros.

 

Currently have 3 balances on 3 different accounts:

Barclaycard: $2100 (0% til this summer)

Walmart: $400 (0% til later this year)

CSP: $3500 (15.24% APR)

Total debt: $6000

 

It's got my utilization at ~20%.

 

@I have a BT offer to transfer up to $5000 to my Discover More @ 0% for 12 months. Would it kill my score to pay $1000 off and take the leftover $5000 and completely max the Discover card? It would mean ALL my revolving accounts would be reporting a $0 balance except for 1 maxed out Discover reporting > 90% utilization on that single card.

 

What do you all think? Regardless I'm going to transfer the CSP to the Discover because of the APR.. but I figured I'd roll in most of the Barclays and pay off the rest.

 

Thoughts?

 


I believe that maxing out any card will temporarily hurt your score until the balance is paid down. Now, whether maxing out one card is better or worse for your FICO score than showing multiple cards with a balance is a YMMV sort of question. The only way to see how different parameters affect you personally is to try it out. For me, I got to 800 TU by having all my cards report $0, and one card report 8%. When I let it report 9%, my TU would not break 800. The best of luck to you.


Personally, I'd always go with the route that saves the most in interest, as FICO has no memory, and unless you're apping for something big in the near future, I'd say it's more valuable to go ahead and save the interest money!

 

Just my .02 though


You don't get charged interest by having a balance reported. So, interest is completely irrelevant when talking about maximizing your FICO by having a balance reported.  But, you of course have to make sure to pay it in full shortly after the statement cuts and the balance is reported. 

 


I understand, but he is talking about rolling a balance each month I believe, because otherwise it wouldn't matter the interest rates on the cards.


Ah. Thought he was talking about the old balance report trick. There is no benefit to carrying a balance beyond that point and have interest charges kick in. 

Message 7 of 13
Jlu
Established Contributor

Re: Maximizing FICO Score while saving on interest

Thanks for the intelligent responses.

 

What I basically want to know is whether it is better from a FICO/Creditor-standpoint to see 2-3 cards with < 35% utilization or just 1 card with > 90% utilization. I have about $5000 debt that I can't (re: prefer not to) pay off but can roll into BT offers @ 0%.

 

I can have my CR say ONE of the following:

 

Option 1: All revolving credit cards $0 balance except for Discover reporting around 90% utilization.

Option 2: All revolving credit cards $0 balance except for Discover reporting around 30% utilization AND BoA reporting around 30% utilization.

 

Regardless of which option I choose my overall utilization is under 20%.

 

I'd be paying no interest in either scenario but WHICH scenario is better for scoring purposes and/or from a creditor point of view. I don't have any immediate crushes on CC's that I JUST HAVE TO HAVE in the near future but we all know how we one day can wake up one morning and say 'hey I really like that AMEX SPG card' LOL.

AMEX BCP $35k | Citi Double Cash $30k | PenFed PlatRewards $25k | Barclaycard $40k | Chase Freedom $25k | BofA Cash Rewards $40K | US Bank Cash+ $4500 | Discover IT $25k | NASA Platinum-Advantage $40k | CapOne Quicksilver $15k | Amazon Card $10k | Ten years on myFICO from 510 to 780 scores
Message 8 of 13
Jlu
Established Contributor

Re: Maximizing FICO Score while saving on interest

Also slightly off topic (but hey, this is my thread).. but I'll keep you guys posted on this one ..it'd be my first AMEX since rebuilding my credit:

 

(Fingers SUPER crossed due the probability of backdating to 2005 if approved)

 

amex.jpg

 

 

AMEX BCP $35k | Citi Double Cash $30k | PenFed PlatRewards $25k | Barclaycard $40k | Chase Freedom $25k | BofA Cash Rewards $40K | US Bank Cash+ $4500 | Discover IT $25k | NASA Platinum-Advantage $40k | CapOne Quicksilver $15k | Amazon Card $10k | Ten years on myFICO from 510 to 780 scores
Message 9 of 13
Jlu
Established Contributor

Re: Maximizing FICO Score while saving on interest

I updated my scores today and applied for CLI's:

 

Chase Freedom $2000 pulled Experian - APPROVED $3000 (womp womp)

Discover More $5000 pulled Transunion APPROVED  $10,000 (!!!!)

BoA 1-2-3 Visa $2500 pulled Transunion APPROVED $10,000 (!!!!)

Walmart GECRB $2000 SP'd Transunion - APPROVED $3000 (yay)
Amazon GECRB $5000 SP'd Transunion - APPROVED $7500 (yay)

Barclaycard Apple Visa asked for PC to Rewards - no go

 

A total of 7 phone calls netted me a $17,000 increase in my revolving credit!

 

 

scores.jpg

AMEX BCP $35k | Citi Double Cash $30k | PenFed PlatRewards $25k | Barclaycard $40k | Chase Freedom $25k | BofA Cash Rewards $40K | US Bank Cash+ $4500 | Discover IT $25k | NASA Platinum-Advantage $40k | CapOne Quicksilver $15k | Amazon Card $10k | Ten years on myFICO from 510 to 780 scores
Message 10 of 13
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