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maxter1
Posts: 1
Registered: ‎07-03-2011
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Which is better for Fico Score?

Anybody know this answer? I have recently paid off all but two credit cards. The remaining two have balances of $1300 and $1400 and both have limits of $1600.

I will be able to pay $1500 this month on the cards. Should I pay one in full or should I pay $750 on both? Within the next few months I will be able to pay them off completely but I am wondering which method will boost my score higher now? Having another zero balance but having the other close to the limit or having two at about 50% of  the limit :smileyhappy:

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notmyj
Posts: 159
Registered: ‎09-02-2010
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Re: Which is better for Fico Score?

It wont make a difference on the utilization as either way it will drop the total the same amount. If it were me, I would pay which ever one has the highest intrest rate first.

4/6/09 EQ 555 TU 498 EX 553
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9/11/10 EQ 610 TU 627
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2/13/12 EQ 677 TU 658 EX 675

From 9/2010 to 2/2012 I have gotten $44k in available credit, and closed on my first home 12/23/2011. All was made possible by the people here. Stay with it, it is possible!
Valued Contributor
visorboy1974
Posts: 1,132
Registered: ‎05-17-2010
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Re: Which is better for Fico Score?


notmyj wrote:

It wont make a difference on the utilization as either way it will drop the total the same amount. If it were me, I would pay which ever one has the highest intrest rate first.


Agreed

Valued Member
miltown81
Posts: 49
Registered: ‎07-28-2009
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Re: Which is better for Fico Score?


notmyj wrote:

It wont make a difference on the utilization as either way it will drop the total the same amount. If it were me, I would pay which ever one has the highest intrest rate first.



100% agree.


Starting Score: 711
Current Score: 770
Goal Score: 780


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Valued Contributor
Mustanglvr2006
Posts: 1,971
Registered: ‎02-06-2011
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Re: Which is better for Fico Score?


miltown81 wrote:

notmyj wrote:

It wont make a difference on the utilization as either way it will drop the total the same amount. If it were me, I would pay which ever one has the highest intrest rate first.



100% agree.


+1

 

Also remember you will see your highest scores with only ONE credit card reporting a balance of 9% or less of it's avail credit limit.

 

So pay off the one with the higher APR first and next month (or when you can) pay off all but like $25 on the other card, let the $25 report on only that one card to the CRA's then after the statement posts, pay the 25 and you'll owe nothing on all your CC's.

 

Keep doing that every month (That's whats called "Maxing your Scores") You do not have to do this every month (most people do this when they are looking to app for another CC, Mortgage, Auto Loan etc.....) but, a lot of people do it this way simply because they like to see their scores the highest possible every month (myself included) and also by doing it this way, it uh, keeps you out of debt LOL.

 

Best of Luck!!


Starting Score: 583
Current Score: 3-03-12-EQ-802 TU-806 EX-798 (EQ Beacon 9: 804 Lender Pull 3-08-12) All FICO's
Goal Score: 800+ across all three

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Senior Contributor
Wolf3
Posts: 3,197
Registered: ‎01-24-2010
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Re: Which is better for Fico Score?


maxter1 wrote:

Anybody know this answer? I have recently paid off all but two credit cards. The remaining two have balances of $1300 and $1400 and both have limits of $1600.

I will be able to pay $1500 this month on the cards. Should I pay one in full or should I pay $750 on both? Within the next few months I will be able to pay them off completely but I am wondering which method will boost my score higher now? Having another zero balance but having the other close to the limit or having two at about 50% of  the limit :smileyhappy:


Disagree with most of the posts above.   

 

The highest utilization of a card and the overall utlization are both used.    So paying each card to equal utilization would be best FICO score.

 

 

Contributor
Elated
Posts: 89
Registered: ‎06-13-2008
0

Re: Which is better for Fico Score?

I'm in a similar situation Maxter. I have paid all of my CCs down to 0 balance with the exception of two cards; however, one of them has a balance of $2300 dollars and my CL is $2500 and the other has a CL of 1150 and I owe $950.

 

So your question is beneficial for me too! I think I'll take the advice of others and pay down the one with largest amount of interest first, then focus on paying off the other.

 

Best of luck to you in your decision-making!:smileywink:

Senior Contributor
Wolf3
Posts: 3,197
Registered: ‎01-24-2010
0

Re: Which is better for Fico Score?

 

Unless you are applying for credit next month, and need a good FICO score, I suggest you pay off the highest interest card in full first.   It will save you some interest money, primarily because interest will stop accruing on new charges. ..

Valued Contributor
Mustanglvr2006
Posts: 1,971
Registered: ‎02-06-2011
0

Re: Which is better for Fico Score?


Wolf3 wrote:

maxter1 wrote:

Anybody know this answer? I have recently paid off all but two credit cards. The remaining two have balances of $1300 and $1400 and both have limits of $1600.

I will be able to pay $1500 this month on the cards. Should I pay one in full or should I pay $750 on both? Within the next few months I will be able to pay them off completely but I am wondering which method will boost my score higher now? Having another zero balance but having the other close to the limit or having two at about 50% of  the limit :smileyhappy:


Disagree with most of the posts above.   

 

The highest utilization of a card and the overall utlization are both used.    So paying each card to equal utilization would be best FICO score.

 

 


I did not take that into account, FICO does score the highest util and the overall util, so paying both equally would be the best for FICO scores initially, because either of those two cards will be maxed out and from a FICO scoring standpoint, I agree with Wolf that paying both down to half their CL's should net you a better FICO initially, but it won't be as good to your wallet APR wise.

 

Aside from that, once you get to where you only have one CC reporting a balance of <9% util, you will then see your highest possible FICO. For me, I see my highest scores while I have 1 CC reporting a bal between 1-5% util (scores stay the same) I have not let 6% util report yet, so I do not know @ what % util my score will drop a little? I did let it report @9% once on one CC and my scores dropped by like 4-6 points but went right back to where they were once 1-5% util reported, and if I let a second card report with even a 5 bal my scores will drop 6-9 pionts, but bounce right back when that 2nd CC reoprts a 0 bal again. FICO scoring model is a fussy little thing, but once you learn what works best for you, you can use it to your advantage.

 

I know how to max my scores and I know what FICO likes me at, so I consider myself lucky, I have played with util and other things and have learned what FICO likes best from me. This is not a game to me or a hobby, this is something I take seriously, and when a person like me comes from a 583 FICO just 17 months ago to almost 800's now, I want/need to be informed as to what I can do to control my financial present/future and FICO's. And for me, that's not using all my new credit ($45,300 of it) to get me in trouble, I kinda pretend I dont even have that much avail credit to me, I only use on my CC's every month what I know I can pay, for me it's that simple to keep mysefl out of trouble.

 

Where am going with all that????? LOL Sorry, I sometimes just get to typing and I find myself 10 minutes later going uhm, OK, that's enough!!!!

 

Hopefully you will achieve your goal, whatever it is, I wish you the Best!!


Starting Score: 583
Current Score: 3-03-12-EQ-802 TU-806 EX-798 (EQ Beacon 9: 804 Lender Pull 3-08-12) All FICO's
Goal Score: 800+ across all three

Take the FICO Fitness Challenge



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