How far down should I pay my utilization (what is the least)?

[Anonymous]

After following very bad advice from a Credit/Busines Consultant who later absconded with my $ and didn't deliver anything (long story) my utilization on personal cards is way too high (was floating some biz expenses as he said he could get me $20k+ fast to pay them down once I got the things in order he suggested). Ok dumb.

Anyway, my scores which were headed towards 750+ and carefully crafted for 18 months are now in the 680 range.  Worse I show $25k outstanding debt and have 6 cards close to maxed out.  My utilzation % is helped by the fact I am AU on a couple of cards, but even with that is over 50%. w/o those close to 100% which is not calculated by Fico but the fact I have balances on lots of cards and lots of cards at max is.  Was turned down by a couple of cards I should have breezed and they cited # of cards, utilizaiton, total debt.  I have friends with lower scores being approved because their u% is far lower even though their score is as well.

I need to pay down to get scores back up and to a reasonable amount of debt and utilization so as not to scare creditors.  I have a finite amount of cash available to me and cannot afford to pay down to 0% w/o more grevious harm to myself/company. 

So my goal is to pay down cards to get out of the 'red zone' while trying to pay down as many as possible (e.g. pay two $5k cards in favor of one $10k) one and get the cards I don't pay off away from their own red zone (max)

What would a conservative estimate be for:

# of Cards with Balances (currently have 6)

Utilization % (50% now, closer to 100% if somoene did the math -AU)

Total Debt (currently $25k which Citibank quoted as too much)

If possible I'm hoping $10k-$15k would get me back in good graces, especially if I can get 5 or so cards paid down.

If anyone else has any idea/thoughts/experiences I'd love to hear them...

[haulingthescoreup]

Well, the trick is that you seem to be asking what you need to do to get lenders to look more kindly upon you, and all we can give you are wild guesses. We just barely know (or think we know) what the FICO scoring formulas want.

The rule of thumb for scoring, and it's certainly not carved in stone, is:

Half or fewer of ALL open credit tradelines (CC's, LOC's, loans, mortgages) with balances
Fewer than half of all open CC's and other revolving credit with balances
Util at 9% or less
No card at 85% or above (lots of debate about this figure)

I agree with the idea of killing off two $5K balances before one $10K balance, in terms of scoring, but you're talking real world. For your situation, I'd be looking at which creditors I'd want to keep on my good side, and which I would be prepared to let go. And that is obviously not just looking at that particular card, but also looking at future relationships.

As for how much of a balance you can allow to show, I have no clue. That question might be better for Biz Credit.

[Anonymous]

Thank you, that is good information.

I'm working with about $15 possibly available to me, which would allow me to get my own (not AU) cards down from 7 of 8 with balances to either 2 of 8 with one maxed or 3 of 8 with the maxed below 75% and another at 50%.  The latter seems to make more sense according to what you are saying.

Complicating matters is Amex reviewed, saw util, cancelled me w/o consideration.  I paid the Green off in full last month, Gold has about $2.5k of $10k remaining which I still have on auto-pay.  I'm talking to them to see if they will restore if I demonstrate the max/util was an abberation and I am back to low utilization.  This after working like a demon to get the cards in the first place.

[haulingthescoreup]

Just to give you something else to brood about, even though the rule of thumb is fewer than half of revolving accounts with balances, it does seem that most of us continue to be rewarded (in our scores) with having even fewer than that. I once got a "too many accounts with balances" for having 3 CC's of 11 report balances, total of 6 accounts out of 14 with balances. Below the rule of thumb, but I still lost points. (Not a lot.)

But that sort of fine-tuning is pretty irrelevant for you at this point, I think. Sorry to hear that you got scammed, and GL getting everything back in order.

[Anonymous]

Thanks again. It is very frustrating, I believe you've been privy on this board to some of the intense work I've done fixing/perfecing scores since 2007.  Frustrating thing was I should have been in fabulous shape and would be minus the 'Recession' and the Scam Artist; 

On the corp side, I'd have a 11 year old Corp listed with D&B, PayDex 80, good tradelines going back a few years, high-credit listed as $20k which is a good profile for biz credit.

On the personal side I'd have 25 year old credit, zero blemishes, and 750s across the board.

Last year that would have been sky's the limit, even this year should be enough to get me $250k+ between personal, biz non-pg and biz pg and I should be moving forward all engines on full to finally launch this product I've worked on for 5 years.

Instead I'm scrambling to not have the rest of my personal credit destroyed, which is going to rest on somehow getting decent non-pg biz lines, monetizing them, and paying down the personal cards I floated everything with.  That's more months of work and lost time.