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New Visitor
Posts: 1
Registered: ‎08-21-2007
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Credit Utilization & Mortgage Question

I have recently -- in the past month -- taken 0%-2% balance transfers on a bunch of my credit cards, to put into high yield savings accounts for several months. I also applied for some new cards and credit limit increases. (After the fact, I discovered that this process is called doing an 'App-O-Rama', meaning 'ApplicationORama', or 'AOR' for short.)

But since then, I've read some credit forums and discovered things about credit scores, and am left with this question:

Let's say I've reached about 55% credit utilization (TotalBalances/TotalLimit). I understand that high utilization will result in lowering my credit score. I am also planning on applying for a mortgage some time in the coming year.

If I return all the balances to zero, how long will it be before the effects of the high utilization disappear from my score? Thanks!
Super Contributor
Posts: 8,195
Registered: ‎03-25-2007
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Re: Credit Utilization & Mortgage Question

When the CCCs report the low utility, your score will start to recover.  It could take a while to get them all reported and the scores updated.  So I would suggest doing it a couple of months before the mortgage app
The slide from grace is really more like gliding
And I've found the trick is not to stop the sliding
But to find a graceful way of staying slid
Contributor
Posts: 102
Registered: ‎07-10-2007
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Re: Credit Utilization & Mortgage Question

It's a shame you can't take advantge of the CC low interest offers without hurting you FICOs. In many cases it is the lowest interest you can get for the short term.
Super Contributor
Posts: 8,195
Registered: ‎03-25-2007
0

Re: Credit Utilization & Mortgage Question

It is legal and fine if you can keep on top of everything, but you need to be in a position where you don't care what your FICO scores are!
The slide from grace is really more like gliding
And I've found the trick is not to stop the sliding
But to find a graceful way of staying slid
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Contributor
Posts: 102
Registered: ‎07-10-2007
0

Re: Credit Utilization & Mortgage Question

The very act of filling up your cards using low interest offers will hurt your FICO. And when your FICO goes way down, the same cards will raise your rates for later and might lower your credit lines. But if you take a high interest personal loan or equity loan your score is not hurt much, maybe even helped. Kind of silly...
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