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About how many points does FICO award you for having all but one of your CCs report a 0 balance? YMMV of course, but anyone have a range? Maybe 5-20 points difference?
I am applying for credit next month. Here is my scenario:
Total amount available to pay towards credit cards: $500
Credit card A = $2500 balance (CL=$3000)
Credit card B = $500 balance
If I only pay B, card A will be the only cc on my CR with a balance. Card A will report with a 83% util but the overall util will be the same no matter which card I pay.
If I only pay A, card A will report with a 66% util, but FICO will ding me for having balance on 2 or more cards.
I'd pay the high balance card. The penalty for a maxxed out tradeline is worse than the bump you'd get in your scenario anecdotally, and 80% might be the magic line even if Chase's new policy broke my testing of 86% utilization.
Either way I wouldn't leave the Discover that high, and ideally bring it further down before any application was made.
Revelate, thanks. How about if I was able to gather a little more money to pay off the cards?
Total amount available to pay towards credit cards: $630
Credit card A = $2500 balance (CL=$3000)
Credit card B = $500 balance
If I pay $130 towards A, that would leave me with a util of 79% on that card. I could then pay the remaining money towards card B so it reports at a 0 balance.
Or would you still pay the entire $630 towards card A? That would leave Card A with a 62% util.
@money_talks wrote:Revelate, thanks. How about if I was able to gather a little more money to pay off the cards?
Total amount available to pay towards credit cards: $630
Credit card A = $2500 balance (CL=$3000)
Credit card B = $500 balance
If I pay $130 towards A, that would leave me with a util of 79% on that card. I could then pay the remaining money towards card B so it reports at a 0 balance.
Or would you still pay the entire $630 towards card A? That would leave Card A with a 62% util.
From a pure FICO perspective, I'd go with option A. From an underwriting perspective, tough to say but probably B.
I guess the big question is simply this: can you delay your apps somewhat to when you have your reported balances in better check? That would improve your odds as a FICO score is only one part of the underwriting equation and I personally believe in putting as much lipstick on the pig as possible.