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Visitor
Posts: 3
Registered: ‎04-03-2007
0

How should I pay down our credit card debt?

Hi - I am new to FICO scoring.  I want to improve our score of 677. The payment history is very good what is dragging us down is our revolving credit is virtually maxed out.  We have a chunck of $$ coming in soon that will reduce the overall debt by about 32%.  My question is should I put the majority of the $$ against one account and alittle bit on all the rest or should I spilt it up more evenly? Would one way verses the other benifit our score more?  We are planning on refinancing our home (maybe as soon as this month) w/ the intention of a home improvement & consolidating our debt.  So I was hoping that paying down our current credit card debt would improve our FICO.  Any thoughts would be greatly appreciated.  I just want to make the most of $$ we be getting. 
Regular Contributor
Posts: 165
Registered: ‎03-13-2007
0

Spread it out so that each revolving account will reflect...

Spread it out so that each revolving account will reflect below 30% utilization. With your hope of refinancing, I would pay each down to closer to around 20% util so you have a little cushion and leeway in the event a new purchase takes you back over the 30% line. If you can wait to refinance until AFTER these payments are reflected on your score, you should get a lower rate.
Visitor
Posts: 3
Registered: ‎04-03-2007
0

Thanks so much for your advise.  We will never get down t...

Thanks so much for your advise.  We will never get down to 30% utilization with the larger limits but I can work the smaller ones down to that and put the rest of the $$ against the rest.
 
Thanks again.
Established Member
Posts: 11
Registered: ‎03-28-2007
0

The general rule is no individual card above 50% and no m...

The general rule is no individual card above 50% and no more than 30-40% overall utilization.
Regular Contributor
Posts: 165
Registered: ‎03-18-2007
0

I did the same. I got a chunk of $$ and paid OFF many of...

I did the same. I got a chunk of $$ and paid OFF many of the smaller balances and paid DOWN the larger ones by only a few Thousand each just not to spend all my cash. I use Score Watch and got a notice my score jumped about 22 points in ONE MONTH if I remember correctly.

Since you are looking to REFI you should wait till you do these payoffs and give the creditors time to report. Then if your score jumps you may get a better rate for the REFI.
Regular Contributor
Posts: 165
Registered: ‎03-18-2007
0

Hmm - thinking back some balances were small so maybe tha...

Hmm - thinking back some balances were small so maybe thats why it only jumped 22. If your balances are higher you may see a bigger jump. Still a 20 point jump is good for any score.
Visitor
Posts: 3
Registered: ‎04-03-2007
0

Thanks again for all your imput!!  It seems as if I my th...

Thanks again for all your imput!!  It seems as if I my thinking may be heading in the right direction. 
 
I'm always open to advise!!
 
Jess 
Contributor
Posts: 83
Registered: ‎03-22-2007
0

I paid down $8000 in credit card balances

Jess,
 
     If many of your cards are maxed out, one strategy that could work for you is trying to get as many of them below 50%, then the following month see if you can get as many as down to 30% UTI.  This way, you could be getting more POINT BANG for your buck, as opposed to using all of you money to pay down your accounts instantly. That's what I did.
 
 What I have learned is that when you put most of your money on paying down your cards, you score will go up significantly, mine did back in February when my Fico scores were Tu 636, EFX 647, and EXP 619. My scores  increased after paying down $8,000 debt in Feburary, and another $3,000 debt in March. Thank God for my big tax refund. 
  My scores shot up 25-48 points since now 2 of my 9 cards have balances about 50% UTI, 3 have 0 balances, and 4 have balances at 30% or less UTI.  I also closed my most recently opened cards and asked my wife to take me off as authorized user on her recently opened Mobil gas card. After updating my reports today, my scores areTU 662, EFX 663, EXP 667.
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