Understanding FICO® Scoring

[sunshinegrlalways]

Hello All,

I did my FICO score again today via myFICO and scored a 738 on TU and 710 on Equifax. I know that everyone may assume why is this one wasting our time but I have a question. I tried to do the simulator but got confused. So I am asking for assistance.

Here are my credit cards: balance, limit  and interest rate.

Bank of Amer 1,600.93 Limit 4,600 15.99%

Chase              6,303.26 Limit 11,000 13.24%

Citi                    1614.83  Limit 4,300 8.24%

CapOne              0.00      Limit 4,100 22.90%

Discover           4,377.45  Limit 8,000 24.99% (just got it lowered to 3.9%)

Target                   975.73  Limit 1,000 22.90%

Question: should I focus on paying off the higher interest rate ones first. I am trying to fix my score to purchase a home. I was told by the bank it was too low. When I asked my bank today for assistance, they told me to have my stuff close to 25% of the limit.

besides purchasing the 3 credit bureau checks, what other products would you reccomend as I am serious about paying off my debts.

Thank you for your assistance!!

[RobertEG]

Their are two different scenarios for paying down CC debt, often at odds to one another.

From a financial point of view, it makes sense to pay the higher interest cards first.

From a FICO point of view, it makes no difference in overall % util, but might make a big difference in the scoring of the combined effects of the % util of your individual cards.

The scoring of %util of individual cards penalizes higher % utils to a greater extent, so paying down the higher util, particulary the near-maxed, cards is the way to go.

It depends on your immediate goals.  If increasing FICO score is the predominant issue, then the higher %util cards would be the first focus.

[GregB]

Also, You will likely benefit from having more accounts report a $0 balance. You also want all accounts below 79% utilization. That lines up pretty well with the two highest interest rate cards, one of which is maxed out (Target). Pay off Target and BofA.

[ztnjpv]

I see you just had one card lowered to 3.9%. Can you transfer balances to it and pay it down more aggressively and more quickly? 

Unfortunately, with your high utlilization, it may be hard to get a long term 0% card like the Citi Diamond Preferred, which would allow you 18 months at 0% to pay down debt.