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Question to creditwherecreditisdue and bigtim this utility...is it the amount of available credit? I have a lot of revolving credit cards, but only use 5, 2 of which I am about to pay off. Two have very high balances. The particular two, AM and BoA, have lowered my limit to my balance. So if I move these balances around among the other cards so that none are above 50% of the usage...would they help or hurt my score?
It looks like from one train of thought it would not matter and the other it would.
750Lady
It would help.
You want to lower your total UTIL and you want to lower your individual UTIL on every card. It is best to have no card report over 50% UTIL and it would be a lot better if that was 35% UTIL. I never use more that 35% of any cards CL for more that a month or two. To do so is just asking for trouble. I have one card right now with 35% UTIL (a 2.99% forever BT) and a total UTIL of 8%. There's no problem with something like that. (EQ FICO = 724, TU FICO = 755)
Also, individual issers also do not like minimum payments. Payments of 5% to 6% of the balance will generally keep you out of the doghouse.
So if I move these balances around among the other cards so that none are above 50% of the usage...would they help or hurt my score?
It looks like from one train of thought it would not matter and the other it would.
Well, it could matter. I don't pretend to be any FICO expert, but logic and some research are the basis of my previous statements. CWCID is correct on the low util thing - I do not dispute that. In response to your question, I pulled my GF's report once, and one of the negative items listed was she was using more than 50% of one of her cards - even though total utility was far less - she had ample credit available with other accounts. Anyway, I doubt the total points concerning these other factors I mention would be very substantial - I'm just saying that THEY DO COUNT - albeit hardly as much as the UTIL factor. Would it be worth moving around debt and possibly gain a couple or few points? I doubt it, but maybe someone else will have a better answer...
OK guys (figure of speech ) it looks like I have a lot to think about. I've been working on reducing balances. I've reduced the number of revolving cards from 13 total cards to 5 and by March down to 3. I guess I'm in a hurry, it's been a long, long road.
I've saved the 2 highest balances for last and the more I pay they don't seem to go away. I feel my money is going into a hole, because I don't see any affect I'm having on the balances. I've even considered trying to negotiate the balances into installment loans with AM and BoA, but don't know if they will go along with that. I know this will put 2 more inquires on my credit (don't want that!).
750Lady
@Anonymous wrote:OK guys (figure of speech ) it looks like I have a lot to think about. I've been working on reducing balances. I've reduced the number of revolving cards from 13 total cards to 5 and by March down to 3. I guess I'm in a hurry, it's been a long, long road.
I hope that is the number of cards with balances and not the number of open account. You need to retain your zero balance account for UTIL purposes.
@Anonymous wrote:
I've even considered trying to negotiate the balances into installment loans with AM and BoA, but don't know if they will go along with that. I know this will put 2 more inquires on my credit (don't want that!).
If you want to move the debt to an installment loan that would be fine. Just don't involve the issuer in the process or you may well end up with i higher that necessary APR for the loan and a closed account for your efforts. Look elsewhere for your loan. (Like a nice CU.)
@Anonymous wrote:[...] it looks like I have a lot to think about. I've been working on reducing balances. I've reduced the number of revolving cards from 13 total cards to 5 and by March down to 3.
I've saved the 2 highest balances for last and the more I pay they don't seem to go away.
Like CWCID said, a basic consolidation loan, at a good rate, to encompass all balances might be a good option - easier management too. Now of course, you have a new INQ and account... If your interest is so high currently that your payments don't do much to reduce the principal, this might be best. Otherwise, the only thing you would gain is easier management and instant reduction of the CC utility - so yeah, a lot to think about - GL.
No the revolving credit cards are all open and all paid-in-full. After March I will only have 3 open accounts. I could probably move some of the debt around (musical chairs) and maintain balances below 35% of the limits, but some of the cards I will not be able to use. Fidelity Bank and First USA have both merged with Chase or Slate, or whatever they are calling them. The now Slate card had a limit of $13,000 lowered to $500 and I fear that Chase will lower it's limit after I pay it off.
Thank you both for all your input, ideas, and suggestions. I will keep exploring my options and the Credit Union is a good one.