Effect of having balance on multiple accounts

[taxi818]

I just did a count and realize I have balances that I'm carrying on 15 out of 21 accounts. I'm now focusing n eliminating the small fry. Paid some taxes. And back due taxes to get to this point. My thinking was better to owe banks instead of big brother. Anyway. Total balances of about 15k. Minimum monthly s about 450 dollars. I pay 4times that. Anyway. Total util is about13% I want half done in 5 months. Pay down. Using Amex premier instead of credit at this point. My scores dived a little after a car loan. But I'm not understanding why not completely tanked.  Eq704. Ex. 710. Tu. 736. 

Lowest balance 93 dollars  highest. 4500. I'm in a mission but can't believe the small affect on fico scores. Highest single card limit. Quicksilver. 0% 12 months. 3600 dollars. 60% usage. Not sure if this is killing me either. I don't need anything right now. Except focusing on pay down. 

[Anonymous]

Hey Taxi!  Glad you are making the decisions that are right for you.

I read through your post and I wasn't 100% sure whether you had any particular questions on which you wanted feedback.

The closest thing I could see is you might want to know whether having  a 60% utilization on a single card could be killing you.  My feeling is "no."  As long as all individual cards are under < 60%, then your overall utilization matters far more than the "per card" U.  (Secondarily, in that situation, the number of cards reporting a balance.)  Of course, it you really wanted to rule out any major effect of the util-per-card factor, you could bring all cards to below 49%.

[NRB525]

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@taxi818 wrote:

I just did a count and realize I have balances that I'm carrying on 15 out of 21 accounts. I'm now focusing n eliminating the small fry. Paid some taxes. And back due taxes to get to this point. My thinking was better to owe banks instead of big brother. Anyway. Total balances of about 15k. Minimum monthly s about 450 dollars. I pay 4times that. Anyway. Total util is about13% I want half done in 5 months. Pay down. Using Amex premier instead of credit at this point. My scores dived a little after a car loan. But I'm not understanding why not completely tanked.  Eq704. Ex. 710. Tu. 736. 

Lowest balance 93 dollars  highest. 4500. I'm in a mission but can't believe the small affect on fico scores. Highest single card limit. Quicksilver. 0% 12 months. 3600 dollars. 60% usage. Not sure if this is killing me either. I don't need anything right now. Except focusing on pay down. 

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For the cards that are carrying balances, is only the one at 60%? Any others over 50%, even small balances? My observation of my score changes over the last several months puts 50% as a fairly clear trigger: Go above it on one more card, lose 7 points, go below it on one card, gain 7 points, in that range. If only one card is over 50% this may be why scores did not go down significantly. This seems to affect EX and EQ more than TU.

Your overall utilization is fairly low, so I'd suggest watching what your utilization is on each card, and try to bring them down percentage wise: First get all below 50%, then all below 30% and see if that helps.

[taxi818]

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@NRB525 wrote:

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@taxi818 wrote:

I just did a count and realize I have balances that I'm carrying on 15 out of 21 accounts. I'm now focusing n eliminating the small fry. Paid some taxes. And back due taxes to get to this point. My thinking was better to owe banks instead of big brother. Anyway. Total balances of about 15k. Minimum monthly s about 450 dollars. I pay 4times that. Anyway. Total util is about13% I want half done in 5 months. Pay down. Using Amex premier instead of credit at this point. My scores dived a little after a car loan. But I'm not understanding why not completely tanked.  Eq704. Ex. 710. Tu. 736. 

Lowest balance 93 dollars  highest. 4500. I'm in a mission but can't believe the small affect on fico scores. Highest single card limit. Quicksilver. 0% 12 months. 3600 dollars. 60% usage. Not sure if this is killing me either. I don't need anything right now. Except focusing on pay down. 

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For the cards that are carrying balances, is only the one at 60%? Any others over 50%, even small balances? My observation of my score changes over the last several months puts 50% as a fairly clear trigger: Go above it on one more card, lose 7 points, go below it on one card, gain 7 points, in that range. If only one card is over 50% this may be why scores did not go down significantly. This seems to affect EX and EQ more than TU.

Your overall utilization is fairly low, so I'd suggest watching what your utilization is on each card, and try to bring them down percentage wise: First get all below 50%, then all below 30% and see if that helps.

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Only 1 card at exactly 60%. no others are even close. the next closest is about 33%. So two cards over 30% and the rest are well below 20% Most being at less than 10%. So im looking seeing that im using too many cards. Different purpose for diffrerent things. I will just bring it all down and focus on carrying few balances. Most of the balances are at 0% apr and the one at 60 percent is due to a BT. Iirc as soon at the card with 60 percent reported my scores dropped about 20 points each across the board but most have recovered at least half of that as my AAoA was always terrible at least since coming to my fico 18 months ago. Ive not applied for anything since early September and finally my AAoA is 1.2 years. Oldest account exactly 2 years old.  Thanks for helping me understand. Such a hard thing to understand fico scoring and the triggers. Goal is to get it down to no more than 4 cards carrying balance out of 21 or 22 accounts.

[Kidcat]

Is 60% the max.  I have one going to report 88% (special financing for a furnace)...2 under 30% and 2 that I let report whatever I used (PIF).  Overall util will be around 19%-21% depending on how the everyday use cards report.  Will having one at 88% make a huge difference?

Edited to add: it will be 5 of 18 cards reporting.  Others 0 balance

[Anonymous]

Hi Taxi.  I agree with NRB525 that you should try bringing that one card with a 60% U down to under 49%.   Here's a possible order of attack, though naturally you will know what is best for you:

(1)  Pay the 60% card down to under 49%.

(2)  Pay off all remaining cards that are charging you interest (creating some $0 balances).

(3)  Pay all remaining cards down to below 29%.

(4)  Pay off more cards to $0 (creating a lot more $0 balances) -- especially if the balances are small.

This will leave you with a fairly small number of cards that show a balance (most will show $0) -- and all of these will be 0% APR.

A medium term goal after that might be to eventually find a way to start always paying your cards in full.  In the future there will be an advantage if your profile shows that you always do this.  (And of course it tends to save you interest.)

You mention that you have either 21 or 22 accounts.  How many of those are open accounts?  Of the open accounts, how many are credit cards?

[Anonymous]

Hi Kidcat.  Yes, having a credit card at 88% will have a significant impact.  But remember that you aren't doing any permanent harm to your score.  It's just that, as long as that card is at 88% (or close to that) you will be losing a fair number of points.  But as that card's utilization comes down -- 80&, 70%, 60%, etc. -- you will get those points back.

I had a longer discussion with another person just a day or two ago.  What I said to him may help:

http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Utilization-question/m-p/4336555#M101580

[Kidcat]

Thanks CreditGuyInDixie.  I will read the other discussion.  I guess you just confirmed what I already know and it had to be done.  With the special financing it wasn't worth it to tap the emergency fund.

Turns out I was already following that other discussion

[Anonymous]

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@Kidcat wrote:

Thanks CreditGuyInDixie.  I will read the other discussion.  I guess you just confirmed what I already know and it had to be done.  With the special financing it wasn't worth it to tap the emergency fund.

Turns out I was already following that other discussion

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You raise a really important point, which is that FICO scoring is not the be all and end all of life.  Any time that a mildly score-negative decision makes a huge amount of financial sense -- especially if the decision has only a fleeting effect on one's score -- then Financial Wisdom trumps Score Worship every time.

BTW, although opinions differ on exactly where the individual utilization of a revolving tradeline begins to become a serious liability, it's certainly a lot higher than what it is for total utilization.  And the closer you get to 100% the faster it becomes a big problem.  My guess is that you will get some significant relief from whatever penalty you were getting from that factor once the tradeline gets below 69%. 

[Thomas_Thumb]

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@taxi818 wrote:

I just did a count and realize I have balances that I'm carrying on 15 out of 21 accounts. I'm now focusing n eliminating the small fry. Paid some taxes. And back due taxes to get to this point. My thinking was better to owe banks instead of big brother. Anyway. Total balances of about 15k. Minimum monthly s about 450 dollars. I pay 4times that. Anyway. Total util is about13% I want half done in 5 months. Pay down. Using Amex premier instead of credit at this point. My scores dived a little after a car loan. But I'm not understanding why not completely tanked.  Eq704. Ex. 710. Tu. 736. 

Lowest balance 93 dollars  highest. 4500. I'm in a mission but can't believe the small affect on fico scores. Highest single card limit. Quicksilver. 0% 12 months. 3600 dollars. 60% usage. Not sure if this is killing me either. I don't need anything right now. Except focusing on pay down. 

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No worries.

Aggregate utilization is king and you are at 13% which is pretty good. Get it below 9% by paying off 10 of those 15 cards. I would suggest getting the # open accounts reporting a balance to 25% (5 cards would be good given you have 21).

Reducing # accounts with a balance will have a greater impact on score than getting individual card utilizations under 30% across the board. After getting count "under control"  bring any remaining cards to under 30% while holding aggregate UT to under 9% [e.g. report less than $10k each month assuming an aggregate CL of $115k)

Note 1: There may be a few additional points to gain by further reducing AG UT to the 4% to 5% range. [No further gain in the 1% to 3% range based on my experience]. So, ideally, you may want to establish a plan to maintain aggregate UT in the 1% to 5% range long term.

Note 2: Impact of high individual card utilization is rather small until you get to the "max out" threshold which appears to be about 90%. Nonetheless, as a general rule, recommend staying below 30% on a card basis.