Ok I got 7 cc's. 5 of them have a balance and it's over 75%.
Overall UTI is 86%
I have enough money to pay off some stuff. Which senerio is better?
Pay on all 5 with a balance and get them all below 50% (they will all still carry a balance though). Or
Pay 4 of the 5 off and lower overall UTI to about 50%. (the one card still with a balance will be at 70%)
tuscani -I edited your title from FIFO to FICO.
If you are putting in x-amount of dollars, then overall % util should not be a factor, as it will be the same regardless of the individual cards it is applied to.
Scoring of individual cards is generally accepted as not being linear. In plain English, that means that higher utils have proportionately more negative impact than lower utils. So paying down the higher utils will give the most FICO benefit if you accept that basic scoring premise.
I would opt for option 1.
The intangible, non-FICO factor is that continuing to carry balances at higher % utils may result in creditor unease, and a potentil credit limit decrease.
That would, in my opinion, also point to option 1.
However, all of that disregards the financial factor, which would suggest paying the highest % apr debts first.
Is the primary goal $$ in pocket, or improved FICO score?
I found a website tool that generates some useful data. The premise being that if you pay your higher interest cards first, the calculator will show you the most amount of money saved which is the highest overall financial benefit to the user. If you UNCHECK the "Payoff highest rate first" box it will calculate by pays off your credit cards starting with the lowest balance. This might help by showing that are clearing your balances on some of your cards.
Note: it does NOT necessarily compute the best benefit to your credit score.
My preference would be to pay off 4 of the 5 cards and as much as you can on the remaining lowest rate card and in so doing pay the least amount of interest. Then go for CLI on the cards that do a soft pull only to lower your utilization percentage. I might also advise deferring buying a residence for another 2 months or three so that the effects of paying down your debt and continuing your monthly utility payments on time will have a greater affect on your credit score. The mortgage forum may be more helpful, but I think your mortgage company is looking for an average of your credit scores to be above 620 in order to grant you a mortgage. If you need to correct data on one or more of the CRAs, now is the time to do it.