I have 4 credit cards total and each have about a 30-40% utilization. I want to pay everything off and get it down to about 5% (which I heard is the best for my fico).
Should I pay 3 credit cards off to a $0 balance, or should I pay each off to 5% each?
Any help is great! Thanks.
Starting Score: (05/2010) 650
@sherrrm wrote:I have 4 credit cards total and each have about a 30-40% utilization. I want to pay everything off and get it down to about 5% (which I heard is the best for my fico).
Should I pay 3 credit cards off to a $0 balance, or should I pay each off to 5% each?
Any help is great! Thanks.
Hi there.
You'll get different opinions on how to approach this and so I will give you mine. 
FICO scores both overall and individual account utilization plus the number of accounts reporting a balance at any one time. I would pay all of them off and from that point forward although there is no one size fits all approach what seems to work well for most people is to have only one of their cards report a small (<9% of it's credit limit) balance each month and then pay in full before the due date. You can use it as much as you want during the month but what's important is the reported balance because for most cards whatever is reported on the monthly statement is what is used to calculate utilization for the month.
You might have to play around with the percentages for a few months to see what works best for you. Some people say that 1-3% utilization helps the most. For others it might be 5-9%. As I said it's not one size fits all.
On any other cards always try and have them report a zero balance each month. That doesn't mean you can't use them just make sure that the desired zero balance on these accounts is achieved several days before their statements post.
Now this tactic certainly doesn't have to be done each and every month unless you are trying to tweak your score as much as possible for a potential upcoming credit application or are repairing and rebuiding your credit.
From a BK years ago to:
EX - 3/11 pulled by lender- 835, EQ - 2/11-816, TU - 2/11-782
"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".
Thanks. I'll do that. Now the only bad thing on my credit will be a cap one paid charge off...I wish I knew about PFDs before I paid it off. I'm going to try some GW letters and keep my fingers crossed.