Looking for guidance

[freewill95]

New to myfico.  I currently have 6 CC averaging from 2k to 4k limits.  My scores are 714(tu) 724(ex) and 734(equifax).  These scores seem to be sufficient in obtaining mortgage refi's and limit increases on said card. Cap1 pushed me from 2k to 4k.  Over the last year, I have paid my cards down to 1900 total..less than 10% of total limit. After finding this site, I'm come to the conclusion that I have alot of room for improvement. Ok, what is the recommended way of pushing my scores to a higher level. I was excited about being debt free this month, but should I carry a baby balance for reporting or have 6 cards with 0 balance?  Here's my official layout, two cap1's , a discover,a CU visa, BOZ mc and a BOA mc. I have a mortgage and a personal line of credit.  Any help will be appreciated and I will try to make my posts shorter.

[Anonymous]

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@freewill95 wrote:

New to myfico.  I currently have 6 CC averaging from 2k to 4k limits.  My scores are 714(tu) 724(ex) and 734(equifax).  These scores seem to be sufficient in obtaining mortgage refi's and limit increases on said card. Cap1 pushed me from 2k to 4k.  Over the last year, I have paid my cards down to 1900 total..less than 10% of total limit. After finding this site, I'm come to the conclusion that I have alot of room for improvement. Ok, what is the recommended way of pushing my scores to a higher level. I was excited about being debt free this month, but should I carry a baby balance for reporting or have 6 cards with 0 balance?  Here's my official layout, two cap1's , a discover,a CU visa, BOZ mc and a BOA mc. I have a mortgage and a personal line of credit.  Any help will be appreciated and I will try to make my posts shorter.

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You should let one card report a small balance each month, with the others reporting zero. That is the generally accepted approach to maximizing scores. Do you have an negatives in your files?

[tufa4311]

Welcome to myFICO. You're looking pretty good, let's see if we can do anything else. Balances: 1-9% reporting per card/overall. Overall 1-9% is good but don't have more than 9% reporting on any one card either i.e. Among all your cards don't have the full balance on just one card if that'll put that card over 9% (even if you're still under 10% overall). Also, have one card reporting every month 1-9%, 0% overall is not good for score optimization.
Now, with scores like that, which are very good, your credit limits should be much higher. I assume there is a reason for that? I assume your utilization was much higher in the recent past?

You talk about your scores but how about your credit report? With scores in the 700's I doubt there are any baddies on it but just confirm for us.

[freewill95]

nothing bad at all...up to a year ago, i carried a small balance on 2 or 3 o fmy cards. nothing major...i think making minimum plus 10 or 20 dollars was my issue.  We would purchase a big ticket item..ie washer ...the card would be at 50% or more....i would pay it off in 3 or 4 montsh...and all was good BUT, i think that was my issue.  It wasn't until I recently that I did a refi that I really noticed my scores. In reference to the refi, I was able to get the best rate through my bank at 734. We(wife and I) don't use our cc at all now but in the past that was the goto item for payment. Part of my concerns is that in the past 2 months, two of the companies...cap1 and citi, raised(doubled our limit) 2k to 4k on their cards. I have 6 cards....3 at 0 balance...400 on one, 700ish on the other two, less than 2k on 19.8k total limit.  should i make minimum payment to push my score or what??

[freewill95]

no negatives....we had heavy usage up till 12 months ago, then we went ballistic and payed everthing off. But for the last 12 to 14 months, we've used debit and just pounded on the cc's.

[NRB525]

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@freewill95 wrote:

nothing bad at all...up to a year ago, i carried a small balance on 2 or 3 o fmy cards. nothing major...i think making minimum plus 10 or 20 dollars was my issue.  We would purchase a big ticket item..ie washer ...the card would be at 50% or more....i would pay it off in 3 or 4 montsh...and all was good BUT, i think that was my issue.  It wasn't until I recently that I did a refi that I really noticed my scores. In reference to the refi, I was able to get the best rate through my bank at 734. We(wife and I) don't use our cc at all now but in the past that was the goto item for payment. Part of my concerns is that in the past 2 months, two of the companies...cap1 and citi, raised(doubled our limit) 2k to 4k on their cards. I have 6 cards....3 at 0 balance...400 on one, 700ish on the other two, less than 2k on 19.8k total limit.  should i make minimum payment to push my score or what??

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Good job on paying down the cards. It seems you have a good solid base of cards that will work to grow your score. Since there are no negatives on your file, the only things you can really do are never miss a payment, and keep the utilization down.

Regarding making minimum payments, that is only to keep from violating the terms of agreement you have on your cards. As a long term strategy, for both FICO and financially, it is NOT APPROPRIATE, and not because it has anything to do with FICO score, but simply because you end up paying full APR interest rates. Said another way, Making only minimum payments is NOT the way to get CLI. If anything, it leads to CLD, Credit Limit Decreases.

The suggestion to get all cards to report zero but one is fine for really optimizing the last 3 points in your score, but in your case, because you want to see CLI, my suggestion is to get all your cards on this plan:

1) Pay the card down to zero so that any prior rolling interest charges are completely paid off and you get back on the regular grace period. You may have to let a statement print with zero balance just to be certain, because often there is remainder interest they spring on the statement. Pay this last bit off immediately when it appears. Absolute zero on the card is the goal.

2) Begin to use the card for regular spend, and continue using it regularly. If there is a bonus category like groceries, gasoline or dining, then try to direct spending to that card to earn % cash back or bonus points that can be used later.

3) Allow the amounts to report on the monthly statement per normal statement issuance (don't try to pay prior to statement cut date)

4) Never go over the available credit on that card

5) Very important: Pay the entire statement balance, in full, PIF, before the due date that is printed on the statement. Don't wait until the day it is due, schedule the payment to transfer a few days ahead. Meanwhile, watch #4 above if new charges are going on the card. It is OK to keep puting charges on the card, just don't go over the full limit.

This operates just like your debit cards, with a bit of time for float, using the bank money at no interest cost. Since you are paying in full, there are no interest costs with this program. Your cards will report activity, report balances, FICO will get used to seeing the balances, your card companies will be soft pulling your report and see that you are using the cards to a certain volume, they will see you are paying in full, they don't have any risk from your charges, and more card companies will want to get in on your action.