%25 is the magic number folks 60 point increase

[haulingthescoreup]

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@Anonymous wrote:

So let's say you have 5 cards with maxed out. Is it better to pay off 2 or three completely and leave large % balance of others,

Or iis it better to pay rnough on each to reduce each below 25% usage?

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Step 1: start by getting each one of them under 50%. If you can't pay them all down to under 50% at one time, get as many under that as possible. That means the ones with the smaller balances first. Then go after what's left. FICO looks at both individual card util, and overall revolving util.

Step 2: After they're all under 50%, work on the rest one or more at a time, with the ideal of eventually having all of them under 10%.

There are different ways to do Step 2. You can pick the smallest card and pay it down. It will go down faster, because of having the smallest balance. Then take that same amount of money and go after the next smallest (snowball tactic.) Or pick the highest interest one, because it's costing you the most money. Or pick the good card, whose issuer you want to impress, and get it down. Once they're all under 50%, you're past the immediate crisis, and you can pick the tactic that feels right to you. But don't slack off--keep going until they're all under 10%.

And if you've had 5 maxed-out cards, it's time to get them out of your wallet and into a sock drawer where they can lie around, playing poker and gossiping. When you've got all of them down under 30% or 10%, you can start using them again, 2 or 3 per month, so that they don't go inactive on you. But let them rest up for now. You can't keep using your cards while you're doing serious paydown, so it's macaroni and cheese time for a while!

[Anonymous]

Thank you for super response.

Q: many of us seem to speak in round 10 digit reductions ---meaning 90%-80%-70% and so on to 10% and 0%.  However OP emphasized 25%.

While this may be a sxmall point, Does FICO clearly and score wise  laso distuingishes within a 10 percentile: such as 29.9% usage different than 20.1%?

[fused]

Even though saving money is more important than your scores, let's put this saving money aside and discuss what is the best method to improving scores as it relates to revolving util%s. FICO scoring has two types of utilization% calculations: one that looks at the extent of utilization on individual revolving accounts (i.e. CCs, overdraft protection and sometimes Heloc’s) and the other is cumulative and looks at the extent of utilization on all of your revolving accounts. Also, important here is that these two types of calculations are weighed equally.

If someone has a say 5 cards maxed-out or nearly maxed-out, the best method on paying these balances is to pay them down equally. The trick is to have the fewest number of CCs reporting util greater than 50%. If someone instead decides to pay off one or two CCs and leaves the others as is this will do NOTHING to improve their scores. Here's why in this example.

CC #1 CL 1000/Bal 1000

CC #2 CL 1000/Bal 1000

CC #3 CL 1000/Bal 1000

CC #4 CL 1000/Bal 1000

CC #5 CL 1000/Bal 1000

Let's say we just pay-off two CCs, CC #1 and #2, and leave the others as is. This is what we end up with: 3 maxed-out cards remaining (almost as bad as a serious derog) and cumulative util at 60%...lousy, lousy, lousy. This obviously doesn't work.

Now let's try it the other way...the right way. Take the 2K that was paid on the two CCs as described above and spread it out over all 5 cards, the result 60% util on each CC and cumulative util at 60% as well. Obviously not great but far better than the other way. By doing it this way, there are no maxed-out CC's and cumm util is still the same.