Accounts with balances and their impact on scores

[Anonymous]

Currently I have about 1-2% utilization on all of my credit cards, but on the myFico scores i have, it says that the accounts with balances (this includes my wife's cards on which I am an AU) is 11 and that it is negatively impacting my score.  All balances are under 3% (including wife's cc's).

Should I pay some of them down to 0 to get a bump in score? Will it bump?  We are getting ready to purchase a house, and every point counts right now.

Thanks for any help offered.

[jackg]

Why not have your wife remove you as an AU on her account?

[Anonymous]

adding me as an AU bumped my scores signigicantly.  she has perfect (>750) credit and clean payments on the cards that i am an AU.  Those cards, as mentioned, have about a 1% utilization.  I am just wondering if I would get a bump if I paid off my three cc's down to zero or if it wouldn't matter since they are at 1% util.

i believe the 11 accounts with balances include my installment loans (5 student loans, car loan)

[haulingthescoreup]

If you're buying the house in both your names, so that the lenders will be looking at both sets of credit, I would definitely pay all but one CC account off to zero. This will minimize util AND the number of accounts with balances.

Having multiple installment accounts can be a pain, as you are seeing, because they automatically have balances while they are open, so you "need" lots of CC accounts with $0 balances to counter them.

Be sure to always have one or two CC's with minimal balances though ($10-20.) I experimented with letting all three report all CC's at $0, and my scores fell 2-6 points. Not huge for me, but it can be a lot worse for others, and you don't want to rock the boat at mortgage time.

Good luck on the mortgage!

[Anonymous]

Thanks for the reply.  i think I will have my wife leave the small balances on her cards, and I will pay mine to zero to see if that helps.  I am hovering just under 700 (675) and want to break that plane before we apply for the loan.  Plus, the mortgage broker we are using said that a 700 score is required for an 80, 10, 10 loan which we are seeking...

Thanks again for sharing your experience.

[haulingthescoreup]

You're welcome!

But unless you have time to experiment, I would advise that both of you have all cards except one (and it can be a shared AU card) report $0. Even though util is the easiest factor in FICO scoring to control, it still takes a while for changes to post.