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m_jonis
Posts: 76
Registered: ‎06-30-2007
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Which option will increase my FICO score the most? credit card question

I currently have 16 active accounts with balance. 13 are credit cards 1 is a PIF Amex card Of the 12 remaining: 1 is a Visa card I PIF for the places that don't take Amex. My total Util is about 20% (I owe $40,000) Now, of that $40,000 I paid off about $2,000 last month All but 5 are 0% financing (like HD,Lowes, Sears) I have two cards that are close (but under) 90% util Which item will help me the most? I have enough money to pay one card to get it down to under 50% util The remainder I can either: 1) Pay off the other card to get under 50% or 2) Pay off a $400 and a $2,000 card completely So I guess which gets me the best bang for the buck? Getting 2 cards to under 50% util, but then still having 13 revolving accounts with balances? Or 1 card under 50% util and only 11 accounts with balances? Yes, the total util will go down the same amount regardless (probably more since I just got about another 10k in credit line increases that have yet to be reported). Thanks!
Finally made it to 813
Moderator Emeritus
Timothy
Posts: 9,252
Registered: ‎03-19-2007
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Re: Which option will increase my FICO score the most? credit card question

[ Edited ]
I can only give you what we know and have you make the call-
 
UTL- FICO treAts Overall and individual UTL almost the same-
You get dinged for every card over 50% UTL-
Count on 10 to 15 points for ever 10% of ULT overall
 
Cards with balances- You will see the 20 point ding with over 50% of open accounts with a balacne-
 
SO-
I don't see you getting under 50% of open account with a balance
You will still have cARDS WITH HIGH utl-
so I say pay the ones with the highest interest rate- and GET A PLAN TOGETHER TO PAY DOWN THE OTHERS-/

m_jonis wrote:
I currently have 16 active accounts with balance. 13 are credit cards 1 is a PIF Amex card Of the 12 remaining: 1 is a Visa card I PIF for the places that don't take Amex. My total Util is about 20% (I owe $40,000) Now, of that $40,000 I paid off about $2,000 last month All but 5 are 0% financing (like HD,Lowes, Sears) I have two cards that are close (but under) 90% util Which item will help me the most? I have enough money to pay one card to get it down to under 50% util The remainder I can either: 1) Pay off the other card to get under 50% or 2) Pay off a $400 and a $2,000 card completely So I guess which gets me the best bang for the buck? Getting 2 cards to under 50% util, but then still having 13 revolving accounts with balances? Or 1 card under 50% util and only 11 accounts with balances? Yes, the total util will go down the same amount regardless (probably more since I just got about another 10k in credit line increases that have yet to be reported). Thanks!




Message Edited by Timothy on 02-11-2008 08:30 PM
Contributor
m_jonis
Posts: 76
Registered: ‎06-30-2007
0

Re: Which option will increase my FICO score the most? credit card question

Thanks.

I have enough to get the two "highest" balances cards to under 50% util then, and that sounds like the best way to go.

The highest interest rate, unfortunately is divided equally among the 4 cards with the highest balances at 4.9% fixed

The 5th is at 2.9% fixed (leave this one for last, even though I could pay it off).

The rest are 0% that are always PIF before the promotion expires, so in the next 12 months, an additional $15,000 will be paid off.

That would bring my total util (assuming no further CLI) down to about 8-9%
Finally made it to 813
Mega Contributor
RobertEG
Posts: 18,416
Registered: ‎03-19-2007
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Re: Which option will increase my FICO score the most? credit card question

You said nothing about plans to apply for new credit in the next few months.  If not, your interim FICO is meaningless.  Strictly from a FICO point of view, it  makes no difference which interim stragegy you follow if  you arrive at the same final point.  %util has no historic affect on scoring.  So take the stragegy of paying off the higher interest rate cards first.
Contributor
m_jonis
Posts: 76
Registered: ‎06-30-2007
0

Re: Which option will increase my FICO score the most? credit card question



RobertEG wrote:
You said nothing about plans to apply for new credit in the next few months. If not, your interim FICO is meaningless. Strictly from a FICO point of view, it makes no difference which interim stragegy you follow if you arrive at the same final point. %util has no historic affect on scoring. So take the stragegy of paying off the higher interest rate cards first.



To the first part, it's not applying for new credit, it's expanding my current credit (ie, asking for a CLI from an existing card every 6 months with no hard pulls). I'm not so sure I'd agree with the statement about which strategy not having a FICO effect If that was the case, then having two cards 'maxed' out wouldn't hurt your score at all, since the total debt is the same as if you spread out that debt evenly. However, it's been stated many times here, that FICO does "zing" you more if you have a card at over 50%. The total util may be the end result, but apparently the "weighting" in that takes individual card util into account. My main question was whether it was "more weighted" for the number of accounts with balances as opposed to two cards over 50% util.
Finally made it to 813
Regular Contributor
sh9730
Posts: 150
Registered: ‎01-30-2008
0

Re: Which option will increase my FICO score the most? credit card question

"I can only give you what we know and have you make the call-
 
UTL- FICO treAts Overall and individual UTL almost the same-
You get dinged for every card over 50% UTL-
Count on 10 to 15 points for ever 10% of ULT overall
 
Cards with balances- You will see the 20 point ding with over 50% of open accounts with a balacne- "
 
 
So, with this is in mind here is my situation:
 
1 card with 3300 CL - 900 balance
1 card with 3300 CL - 1200 balance
1 card with 850 CL - 0 balance
1 card with 1000 CL - 0 balance
1 card (dept store)  with 500 CL - 240 balance
 
You would then suggest paying down the store card next since I wont quickly get to below 10% on either of the big cards, right?   I hear on other boards that some recommend then rotating the PIF cards with some small util every couple months (leaving others as PIF) to show some use of credit.  They say that helps the score also?
 
Im going mortgage hunting soon so getting a quick bump up will be helpful....
 
Thanks.
Moderator Emeritus
ByrdMan
Posts: 7,970
Registered: ‎12-19-2007
0

Re: Which option will increase my FICO score the most? credit card question



m_jonis wrote:


RobertEG wrote:
You said nothing about plans to apply for new credit in the next few months. If not, your interim FICO is meaningless. Strictly from a FICO point of view, it makes no difference which interim stragegy you follow if you arrive at the same final point. %util has no historic affect on scoring. So take the stragegy of paying off the higher interest rate cards first.



To the first part, it's not applying for new credit, it's expanding my current credit (ie, asking for a CLI from an existing card every 6 months with no hard pulls). I'm not so sure I'd agree with the statement about which strategy not having a FICO effect If that was the case, then having two cards 'maxed' out wouldn't hurt your score at all, since the total debt is the same as if you spread out that debt evenly. However, it's been stated many times here, that FICO does "zing" you more if you have a card at over 50%. The total util may be the end result, but apparently the "weighting" in that takes individual card util into account. My main question was whether it was "more weighted" for the number of accounts with balances as opposed to two cards over 50% util.


I think what RobertEG was saying was that if you are not going to app for awhile, then your score doesn't matter. After you get your uti in line, your score will be where it needs to be, all other things being equal.
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