Util vs. # of accts. w/balances

[Scamp]

Due to some unexpected circumstances on various fronts, I'm in a temporary, icky position of not being able to PIF the ideal-more-than-half of my cc's before they report, and a couple of them have crept up to about 23-24% util, and I don't know whether to shoot for getting 0 balances reporting on a couple of cards and letting that higher util report on the others, or to let all cards report balances but get as many as possible to report under 10%.

Here's what I'm looking at this morning:

Major cc (BT'd card): $3,247/$7K CL (reported $3350 last cycle)

Major cc2:  $100/$1500 CL (reported $110 last cycle)

Major cc3:  $149/$1K CL (reported 0 last cycle)

Major cc4:  $695/$3K CL (reported $280 last cycle)

Major cc5:  $86/$1500 CL (reported 0 last cycle)

Store cc:    $351/$1500 CL (reported $295 last cycle)

After paying my housing expenses, I have about $400 to throw at these, this paycheck, and I'm assuming there's no point in putting much toward the BT'd card, since throwing it all at that would get me to only 41% util (?), not enough of a drop to offset everything else reporting as-is (?).

I THINK, after researching various threads on here, that I'm better off going for getting as many 0 balances to report as possible (even if it's only 2 accts) rather than getting the two 23%+ accts under 20% and letting all cards report a balance, but I'd appreciate more knowlegeable members confirming this...?

Or am I missing something else altogether about scoring, and a completely different tack is my best bet?

Thanks for any info anyone can provide. 

(edited to add what reported last cycle on each card)

Message Edited by scapegrace13 on 08-02-2008 09:07 AM

[MattH]

There is no universal answer because each of the three CRAs has different weightings on these factors. Fair Isaac normalizes the scoring models so that overall they have extremely similar distributions, but any individual may land in different places. From both discussions on this board and my own observations, I believe EX places more emphasis on overall percent utilization of available revolving credit, EQ places more emphasis on total dollar amount owed on revolving credit, and TU places more emphasis on number of revolving accounts reporting a balance. If this view is correct, then moving balances around will have little effect on EX or EQ scores, only reducing the total amount owed (or in the case of EX, getting a credit line increase) can do much.

Can you cut back on "wants" and purchase only actual "needs" during this time when paying in full is not feasible? That could make a major difference not only in FICO score terms but also in overall financial terms.

[granny031350]

IMHO, if you are not looking to app for any additional credit and have no one pulling your scores in the next 30 to 60 days, does it really matter?  Pay what you can on what you can and try not to sweat it.  I think we all get so Fico'd out here that I find myself stressing over something that will correct itself in the next 30 days.  If you are the only one looking at your scores, take a deep breath and step back.  Course if you have Amex, well then that is different.  Those people live in absolute fear of their score every waking moment. 

The consensus here is anything that goes down due to utilization etc will go back up when it is paid off. 

[MattH]

---

@granny031350 wrote:

IMHO, if you are not looking to app for any additional credit and have no one pulling your scores in the next 30 to 60 days, does it really matter? Pay what you can on what you can and try not to sweat it. I think we all get so Fico'd out here that I find myself stressing over something that will correct itself in the next 30 days. If you are the only one looking at your scores, take a deep breath and step back. Course if you have Amex, well then that is different. Those people live in absolute fear of their score every waking moment.

The consensus here is anything that goes down due to utilization etc will go back up when it is paid off.

---

Good, sage advice! I would add, if you cannot pay in full then try to keep more of the balance in whichever accounts have lower rates of interest -- but watch out for pushing any single account up to where they might bump you up to a higher rate.

If you will need to carry significant balances for more than a few months, then you might consider taking out a loan with a local credit union, which should carry a lower rate of interest and report as an installment loan instead of a revolving loan. Of course if you take out any type of consolidation loan you must avoid allowing those credit card balances to drift upwards again so you end up even worse off than before, moving debt around is only a temporary expedient not a real solution. The big danger with turning revolving debt into installment debt is it may reduce the sense of urgency about fixing the root cause.

[Scamp]

Thanks for your responses, Matt and Granny, and great advice for a long-term question, but I guess I should have emphasized a bit more that this is strictly a one-shot, super-short term issue for me, trying to minimize the drop in score I'll have for this reporting cycle; I'm just trying to do the best thing for my score right now, at this 'snapshot' juncture.  I'm sorted for the long-term, just need help with this immediate situation.

The reason I'm sweating my scores so much is that I have a short overall history, 3 of the accounts above are only months old (including the BT), and I'm concerned that too much of a dip in my scores from when those accounts were opened or too much of a rise in util on other accounts - even briefly - will engender AA from some or all of my creditors - particularly neurotic AmEx and that BT'd cc, in this paranoid credit/economic climate we're in right now.

My dilemma is only a one-reporting-cycle dilemma, but I do want to minimize the drop in scores any way I can, since I'm not able to prevent a drop completely by paying everything I normally would before it reports (ETA: which would be paying off the 3 smallest in full and getting the 23-24% utils down at least under 20% for reporting purposes - that BT'd card is a long-term pay-down), this cycle, to help head off potential AA on my accounts.

So I AM hoping to get a more clear-cut answer on how best to apply that $400 to the balances showing above to minimize score damage right now and over the next month or so, until I'm able to getting all the 0 balances showing again where they should be and the bigger-balance cards paid down another chunk as normal, the way I wasn't able to this past month.

Thanks again for your responses.

Message Edited by scapegrace13 on 08-02-2008 09:01 AM

[MattH]

If it's just for a month or two, and you're not going to be applying for credit, then don't sweat the FICO scores, they'll recover quickly when you pay those balances down. Just focus on minimizing interest costs by directing most of your dollars toward higher-rate debts (while, of course, paying more than the minimum on every account).

[granny031350]

well I think his issue is his amex account which is new and he is afraid of a rate freeze because of the newness of the account and because amex is absolutely the worst.  Why anyone would want to suffer with their cards is a mystery to me.  But anywhoo, if you only have the 400 then see which card that takes to a zero balance and go from there.  It may not be 1/2 of your cards reporting zero but at least a lower percentage than otherwise.  If there isn't enough to do that, then take 1 card down to almost zero and sweat and hope and pray that amex doesn't realize it.  GL. And as soon as you get paid again, pay on the cards, even if it won't report the zero'd balance until after the statement cut date.  I would pay 2/3/5 in full and the rest on the last one and then go from there

Message Edited by granny031350 on 08-02-2008 01:04 PM

[Scamp]

Thanks again, Matt and Granny, for your responses and suggestions.

Had to get these payments made today, and the end result was this:

Major cc (BT'd card): $3,247/$7K CL (reported $3350 last cycle)  Nothing today.

Major cc2:  $100/$1500 CL (reported $110 last cycle) PIF today.

Major cc3:  $149/$1K CL (reported 0 last cycle) Nothing today; is an AmEx cc & should still report 0 this cycle, due to their weird reporting ways, as bal. was 0 on last statement date - fingers crossed.

Major cc4:  $695/$3K CL (reported $280 last cycle) Paid down to $569 to get reporting under 20% this cycle

Major cc5:  $86/$1500 CL (reported 0 last cycle) Nothing today - found out after I posted that the statement had already cut, so $86 will report this cycle. Rats.

Store cc:    $351/$1500 CL (reported $295 last cycle) Paid down to $275 to get reporting under 20% this cycle.

So, with a bit of luck, I'll still have 2 accounts report a zero balance, the BT'd card down just that little bit (but still down), and the others, although up some, still under 20%.

Hoping that'll maintain 'holding action' on my scores this reporting cycle, until I can start getting my long-term plan back on track after this short-term hiccup that necessitated running up those two cards that are at ~20% right now (had been keeping all cards but BT at 0 or tiny % reporting while using minimally each month to keep all creditors happy, while still paying BT down on a plan to get paid off before end of 0% promo period).

Granny nailed it - I'm very worried that, as bad as the economy is right now, new as my credit history is right now, and paranoid and over-reactive as AmEx and others are, right now, even a small drop in scores from what they were at approval on the newer cards, or balances creeping up at all over 10% or maybe 15% on any cards while I'm paying down that BT, will prompt AA by someone, possibly starting a domino effect that really trashes my credit.

However - I'm a 'she'.

Wish me luck, and thanks again! 

Message Edited by scapegrace13 on 08-02-2008 10:40 AM

[Anonymous]

Though it is important to be proactive and thoughtful, I really think you don't have to worry. Your actions sound prudent considering your circumstances. I don't think 20% utility will cause too many lenders to freak out.

[Scamp]

---

debtisgood wrote:

Though it is important to be proactive and thoughtful, I really think you don't have to worry. Your actions sound prudent considering your circumstances. I don't think 20% utility will cause too many lenders to freak out.

---

Thanks for that reassurance, debtisgood.