Should I pay OFF or pay down??

[user5387]

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@Fico2Go wrote:

Guiness,  why pay off all but one with a small balance? 

Is there a reason why this strategy would be superior to keeping all cards under 10%? 

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This article explains some of the details:

http://ficoforums.myfico.com/t5/General-Credit-Topics/Figuring-out-my-utilization/m-p/785481#M147161

I don't think these rules are in the scoring model just to be difficult.  Presumably, they synch up with human behavior, in terms of what predicts future problems.  A score is used to predict delinquency, and factors that don't help with this prediction presumably are excluded.

I think it's obvious why high overall utilization is a problem.  In terms of the number of cards with balances, it might be that this indicates that a person doesn't really have their financial affairs fully in order, and thus there are signs of trouble for the future.  I have seen many postings where people have a bunch of cards with balances, and there is often a crisis of some type involved.

In the case where no cards are reporting a balance at all, perhaps this is a sign of being overly conservative, or anticipating future problems, and thus there's a small ding.  It's also true that CC companies and other creditors like to see some signs of life.

[lg8302ch]

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@Fico2Go wrote:

Great.  It's just one of those FICO thing I guess.   

If that's how the game is played then we need to play it. 

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If you are a SW subscriber you can test it for yourself. I challenged SW with my cards before getting Chase Mariott. So my little game was to see the result of Fico with reporting a 1$ balance on all 8 accounts.  While util was only 1% my score dropped 50+ points for that...Real punishment!  An other test was reporting my lowest card (Discover) with 70% all other accounts with 0 balance which lead to a util of 3% or something like this. Score was 40+ points higher.  The heavy ding for accounts reporting a balance is for me 50% or more. Since I hate micro management I simply make sure not more than 4 accounts report a balance and then the score is fluctuating +/- 20 points.

[Fico2Go]

IG83, I just signed up for sw and have access to CRs for unlimited pull for EX and EQ.

I have been testing several scenios myself and its quite useful. A month ago I had only one CL with 600 limit and $250 balance. So ratio wise its pretty bad but my scores were 700+.

Two weeks ago a new acct was added reducing my ratios to 10%. Despite several inquiries and new my scores incactually increased.

I cant wait til three new accts get added in the coming days and see which direction scoring will go.

Its going to be the battle between three new accts vs. lower UTIL.

At the cost of a few inquiries and lower AAoA.

Next month after everything settles I'll start implimenting the A B testing.