What to pay on next? (For best scoring increase)

[Anonymous]

About to get a christmas bonus, an incentive payout, and some overtime all posting on next paycheck (in total about 1500). But how do I pay down on my cards for best score increase?

0/3500 (Syncrony Card)

0/1000 (Slate)

4300/7600 (Kay)

1366/9500 (Freedom)

2400/4600 (Citi)

4300/10000 (BOA)

I know that Kay is my highest Util right now, but I also know paying off a balance and having less accounts reflect as owing a blaance is a positive as well...any insights?

[Anonymous]

You have 6 accounts and 4 of them have balances.  A scoring ding happens related to number of accounts when you're at 50% or more accounts with balances.  Paying off 1 of the 4 wouldn't matter in terms of number of accounts with balances, because you'd be dropping from 67% to 50%, which is still "50% or more."  You'd be best suited to pay down an account that would cause you to cross a utilization point such as 28.9% or 48.9%.  Looking at your accounts, your Kay and Citi accounts are sitting in the 50%-60% utilization range.  Splitting your $1500 available between those two accounts would take both of them down into the 30's-40's, crossing the 48.9% threshold on each.   

Also, it looks like you're currently at about 34% aggregate utilization and by paying down $1500 in debt (on any cards, that doesn't matter) you'll end up at 30% aggregate utilization.  If you get that number to 28.9%, you should see a pretty nice score gain.  The score gain in crossing that 28.9% aggregate utilization point will likely exceed the score gain realized from taking the two > 48.9% utilization accounts to < 48.9% utilization.  It looks like that aggregate utilization point could be achieved by you paying off another $450 or so in debt, or $1950 total.  just something to keep in mind!

[SouthJamaica]

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@Anonymous wrote:

About to get a christmas bonus, an incentive payout, and some overtime all posting on next paycheck (in total about 1500). But how do I pay down on my cards for best score increase?

0/3500 (Syncrony Card)

0/1000 (Slate)

4300/7600 (Kay)

1366/9500 (Freedom)

2400/4600 (Citi)

4300/10000 (BOA)

I know that Kay is my highest Util right now, but I also know paying off a balance and having less accounts reflect as owing a blaance is a positive as well...any insights?

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I would pay it all towards Kay

[Anonymous]

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@SouthJamaica wrote:

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would pay it all towards Kay

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SJ, I'm curious why?  Above I suggested how he could have 2 cards cross the 49% threshold, where if he put it all toward one he would only be crossing that threshold on one and not even crossing 2 on that one.

[SouthJamaica]

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@Anonymous wrote:

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@SouthJamaica wrote:

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would pay it all towards Kay

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SJ, I'm curious why?  Above I suggested how he could have 2 cards cross the 49% threshold, where if he put it all toward one he would only be crossing that threshold on one and not even crossing 2 on that one.

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I  have not detected any difference between 51% and 49%, so to my eye 50% is not a real threshold.

There is a substantial difference between 31% and 29%, so getting Kay closer to 29% seems to be the way to go.

[909]

What are the interest rates on the cards? I know you asked about score impact but unless you need to increase your score for a credit app, e.g. a mortgage, then total cost could also be a consideration.

Well done on using your bonus to pay down your debt! (Go Ms!)

[Anonymous]

I'd have to agree with 909.  Unless you're looking to optimize score for an upcoming large purchase like a home or car, (boat?) you're better off paying down whichever has the highest interest and pocketing the savings.

[HeavenOhio]

OP, what's the outlook for the next couple of months after you pay the $1,500? I think that's when you're more likely to see a score increase, either by having fewer cards reporting or by crossing thresholds. I don't see a lot of potential for a score increase this time around, but I can see it happening in the relatively near future. What you anticipate doing down the road can help you decide where to put the $1,500.