Moderator Emerita
Posts: 28,098
Registered: ‎04-01-2007
Re: Help in understanding debt to credit ratio and the effects on scores

jbhenrietta wrote:

                       Open         Total Number   Available   Limit   Debt to         Monthly             Accounts with 

                       Accounts     Balance                                 Credit Ratio    Payment                Balance


Mortgage              0               $0                 N/A       N/A        N/A             $0                         0


Installment            2             $2,026             N/A      $958       211%          $133                      2


Revolving              5              $1,471            $244    $1,715       86%          $120                      5


Other                   0               $0                 N/A        N/A        N/A            $0                          0


Total                    7              $3,497            NaN     $2,673      131%         $253                       7


Okay, This is how the original post should have read. I had to make some changes in the format and it took me a bit. The above is from equifax. The installment is not correct as stated in the original post.

Thanks for any help!

*uncrosses eyes*

OK, here's what I see:

For revolving (CC's):

5 accounts - total balances - $1,471 - total CL: $1,715 - total util - 85.77% --> 86%

The installment accounts are fine, once the original loan figures are reported correctly. We'll take that as read.

So that leaves the revolving, and your util is killing you. Util (utilization) is the sum of your balances being reported divided by the sum of your (CL's) credit limits. Your total of balances reporting should be $150 or less (9% of total credit limits.) Since you have two open installment loans plus 5 open CC's for a total of 7 open accounts, only 3 should report balances. As open installment loans always have a balance, that means that only one CC can report a balance for maximum scoring.

Pay off all your CC's except the one with the largest CL. Multiply the CL on that card by .09 (9%) and pay down your balances to that figure or lower. That is the figure that should report on that one card, with all the others reporting $0.

Most CC's report to the credit bureaus on your statement dates. Not the due date, but the date of the statement; when it posts. All you have to do is go online 3-4 days before you expect the next statement, and make your payment. Check again the night before or morning of the statement date to make sure that nothing snuck in. Pay again if there's a balance. On the card that you're allowing 9% or less to report, pay down to that figure 3-4 days before the statement date, let the new statement show online with that balance, and then pay it off.

If you don't have any baddies, and if that installment mess gets cleaned up, you should get a big score boost from this.

If you are hoping to take on a mortgage, you need to be in complete control of your CC debt, along with having a big chunk of money in savings.
* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit?
FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007