Rebuilding Your Credit

[BackInTheSaddleAgain]

Okay Experts, I really need a little advise here. I am rebuilding my credit from a business BK in 2007. I would like to refinance 2 cars (with high interest rate loans) sometime over the next month, so I want to posture my report for the best score possible in the meantime. How do I do that? Over the past year I have kept my total CC utilization at less than 2% on all 4 of my cards. This month I tried keeping a little higher balances on my cards, but that manuever just cost me 5 points on Equifax and 15 points on TransUnion (both myFICO). Obviously, I kept too much on them; especially Merrick. So here's what I did:

CL / Utilization:

CapOne: $1,500 / $193

Merrick:      $750 / $283

CreditOne: $550 / $4

WalMart:        $0

Should I pay Merrick off completely, or keep $10 or $20 on it? How about CapOne? I realize the common thought for max score is total utilization at 9% or less. Therefore, would you keep 5% to 9% on ONE card, or distribute it over 2 or 3 cards? Anyways, I would not only like to refinance 2 cars soon, but I would also like to apply for a prime card as well.

Thanks ahead of time for your input and advise.

[Barris]

My advice is to to spread out the 9 percent over your cards keeping the largest balance on the card that has the oldest TL.

[dodfire]

If it were me I would pay off Merrick and Credit One put your balance on Cap One at $135 that will give you 9% UTL on the Cap One card and an overall UTL of 4.8%...thats my thoughts.

[BackInTheSaddleAgain]

Thanks. By the way, I don't need to carry a balance. I am only doing so as an attempt to maximze my scores. So you think a 4 or 5% utilization on one card is the key? Makes sense to me I guess. Unless 2 or 3% would be better. Regardless, putting the proper balance on my oldest card makes sense too (CapOne). Also, I left out my $400 CL on my original post. My total CL is $3,200 between the 4 cards.

[rckstrscott]

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BackInTheSaddleAgain wrote:

Thanks. By the way, I don't need to carry a balance. I am only doing so as an attempt to maximze my scores. So you think a 4 or 5% utilization on one card is the key? Makes sense to me I guess. Unless 2 or 3% would be better. Regardless, putting the proper balance on my oldest card makes sense too (CapOne). Also, I left out my $400 CL on my original post. My total CL is $3,200 between the 4 cards.

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My personal experience, I get the best score from having all cards show 0, and one showing a sub 9 percent balance

-scott

[dodfire]

I am not sure how accurate the "FICO Simulators" Are but when I have played with them if you drop below 2% you see a much less possible increase in your score. I had very small balances on several of my cards keeping them all around 3-5%...I then paid them all off with the exception of one card...left it around 10% UTL just for that card...and my TOTAL UTL was about 3% I got an increase of 12 points just for moving the money to the one card.

Just play around with it a bit and see what works for you.

[Crossdivided]

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dodfire wrote:

I am not sure how accurate the "FICO Simulators" Are but when I have played with them if you drop below 2% you see a much less possible increase in your score. I had very small balances on several of my cards keeping them all around 3-5%...I then paid them all off with the exception of one card...left it around 10% UTL just for that card...and my TOTAL UTL was about 3% I got an increase of 12 points just for moving the money to the one card.

Just play around with it a bit and see what works for you.

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Not Very. Really a better tool to determine "bad move" vs "good move" in my opinion. I wouldnt base mortage qualification date projections on it or anything like that.

[js0319]

+1 

[BackInTheSaddleAgain]

Thank You everyone. Based on your input, I think I will try the following formula next:

• CapOne:    $1,500 / $50 = (3%)
• Merrick:      $750 / $25 = (3%)
• CreditOne: $550 / $0 = (0%)
• Walmart:    $400 / $0 - (0%)

TOTAL Utilization = 6%

Any other advise or input is GREALTY appreciated.