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Utilization - best strategy to pay down multiple cards?

Member

Utilization - best strategy to pay down multiple cards?

I know that your FICO improves if your credit cards are under 50% utilization and even better if under 30% but can you get an increase if you have cards with a balance over 50% but pay another one down to under 30%? I have a few cards that would take little money to get down to 30% of the balance, but I'm not sure whether I should focus on getting all cards down to under 50% first.
 
Thanks!
5 REPLIES
Super Contributor

Re: Utilization - best strategy to pay down multiple cards?

They look at the total utilzation of all your cards put together, so moving it around does not help much  Smiley Sad
The slide from grace is really more like gliding
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Member

Re: Utilization - best strategy to pay down multiple cards?

Just to clarify--I'm not moving things around, but paying down balances.
 
Overall utilization may be one of the things they look at, but I know if you have one card maxed you have a big minus, regardless of overall utilization. I just wonder if you have any card over 50% if the FICO formula gives you any credit for other tradelines that are in good shape.
Senior Contributor

Re: Utilization - best strategy to pay down multiple cards?

I'm not sure about that, but don't spread it around too much. Too many cards with balances does hurt your score too. The simulator showed me having 1 card with a high balance was better than many with smaller balances for same UTL. But then that was for my credit portfolio and may be different from yours. I might test that on my next experiment with credit card debt. I have noticed when I moved around balances (transfers) to lower apr cards my score did not change. I am basing this on my credit files. I don't know it is the same for others.

When ever you carry a high balance, try not to use other cards for little purchases until the total debt is below 30% UTL.

Message Edited by ilovepizza on 06-07-2007 09:52 PM
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Moderator Emeritus

Re: Utilization - best strategy to pay down multiple cards?

Sjh is right. One maxed out card is more detrimental to your score than if you evenly distributed that debt across several cards.
Regular Contributor

Re: Utilization - best strategy to pay down multiple cards?

If all accounts are on time you maybe able to request a CLI on all of them and pay down more on that 50% one. If you can pay down on your 50% card PLUS get a CLI on all cards it will help your UTIL and you will see a Score Jump. After a certain point tho you may not get CLI's but I did this like 3 times over 6-8 months and got some nice CLIs of like $1500-3000 each time and that helped me. Each senario may yield differnt results but I think you should see a jump as long as all is good standing.

Make sure they are ONLINE or PHONE CL Increases that say they will NOT pull your report. If they do, then forget it and move on to the next.