Understanding FICO® Scoring

[tblank65]

what is the estimated points to be gained by paying revolving debt of 57 % down to 7% im a little lost here....one adviser says use the credit avail.and pay off monthly..others say keep revolving accounts at 7% and no more than 10.......confused

[llecs]

Points gained depend on your balances w/ assoc. CCs before the pay down in relation to the the balances after. If you list out each balance and each CL and each CC we can better guesstimate. Aside from overall utilization, individual utilizations and mix of credit play a big part into the calculation.

For max points your goal is to pay off 1/2 of your CCs with the other half of your CCs at 1% to 9% of your CLs. There seems to be some necessary tweaking for max points. You could always try one CC at $1, then expirement with $50, $100, and so on all the while keeping it under 9%, depending on your CL. Some have kept 1/2 at 1% but found small gains by tweaking to 2%, for example. YMMV.

[tblank65]

well as far as debt i dont have much (2 credit cards)after a divorce...0 car payments, and 0 house payments..first premier with a 250 limit is at 125 balance ,capital one cc is a 3250 limit and has approx 1750 on it...not much into running up debt while repairing credit from divorce

[llecs]

Did you pay both down to 7%? Or is one util higher than the other, and if so, what are those new balances?

[tblank65]

nope both are at 50% on each card

[llecs]

Based on your info, if you went from 53.6% utilization down to balances of $18 on FP (approx. 7%) and $228 (7%) on CapOne, then I'd estimate a 25-30 point increase. If any of the individual utilizations exceed 10%, then the gain would be significantly less. If one CC was paid to $0, then I'd guess 30-35 points. If you had one store or charge card in your mix with the same 7%, then I would have guessed 35-45 points.

[mod755]

I recently paid down from 65% to 25%. I got an increase of 33 points on EQ and 49 points on TU.

[ByrdMan]

I usually guesstimate 8-10 points for every 10% of util decrease. This is provided that there is only one card reporting a balance.

[RobertEG]

tblank, here is my two cents.

The discussion about whether 10% vs less than 9%, but greater than 0% is better is all just extreme fine tweaking of FICO scoring. No one has a copy of the FICO algorithm in their pocket, so cannot tell you definatively.

What is definitive is that unless you are about to app for new credit, it just dont matter from month to month.  % util FICO scoring has no memory of last month.  I would focus on overall % util, and not worry about fine tweaking each card, or the number of cards that monthly report balances until you are ready to actually app for new credit.

I would concentrate, until FICO scores really matter, on overall % util, and not on whether I PIF over half my cards each month.  Lipstick on a pig.

[smallfry]

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RobertEG wrote:

tblank, here is my two cents.

The discussion about whether 10% vs less than 9%, but greater than 0% is better is all just extreme fine tweaking of FICO scoring. No one has a copy of the FICO algorithm in their pocket, so cannot tell you definatively.

What is definitive is that unless you are about to app for new credit, it just dont matter from month to month.  % util FICO scoring has no memory of last month.  I would focus on overall % util, and not worry about fine tweaking each card, or the number of cards that monthly report balances until you are ready to actually app for new credit.

I would concentrate, until FICO scores really matter, on overall % util, and not on whether I PIF over half my cards each month.  Lipstick on a pig.

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What you say is true but in this credit climate I would be careful because you might get severe AA from an issuer if they don't like the way you are handling all of your accounts.