topic Re: Utilization question in Credit Card Applications

Utilization question

Anonymous — Thu, 27 Dec 2018 15:18:28 GMT

Guys: I'd like to reduce my overall utilization ratios... I have about 3 cards ~ with relatively low CLs. about 3k each with high utilization 85-90%, and like 4-5 more cards at zero percent. overall utilization is around 41%. Main goal is to reduce overall utilization and avoid unneccessary HPs saving on interest would be nice but not a primary goal. Want to transfer as much of this balance with as little pulls, ideally onto one card. The 3 options I feel are viable are:

1, Discover, I've heard is great for this especially since they do SPs for CLIs which I think is great. The pre-approval page shows 2 cards being pre-approved IT Cash, IT Core, but the balance transfer offer is only 6 months @ 10%, seems like a bad sign.

2. Ask for CL increase on, it just occured to me I should probably ask to increase my limits on atleast 2 of those cards which I plan to keep using. Chase Freedom (original) and Capital One Quicksilver, but intuitively it feels if my utilization is so high, it's probably not the best time to ask. Or... will they see I have a good amount of available credit on my other accounts? Also Chase is sending me pre-approvals for Saphire Preferred, Slate, and Freedom Un.

3. Credit Union, I've read they are more generous with SLs, especially NFCU for example, but no 0% offers. This could work but Ideally i'd prefer to skip this if possible. I much rather get a Discover or Citi, Amex...etc..

What do you guys reccommend? Avg score is 670 across the board and 2-3 almost expired HPs in each report.

Thanks in advance,

Re: Utilization question

HeavenOhio — Thu, 27 Dec 2018 15:48:55 GMT

I think that before applying, you should pay your cards down so they're each below the 48.9% threshold. To do that, bring them down to 47%. That'll keep the next month's interest payment from bumping you back over the threshold.

The exception to waiting would be if you went the Credit Union route. You could do that anytime. NFCU had 0% offers last January. I wonder if that's annual.

A Chase CLI (credit limit increase) request would have a pretty strong chance of denial and would result in one or two hard pulls. It would make sense to wait until your balances are in better shape. But if you want to roll the dice, you could. Just don't go into it with high expectations.

You can request a Capital One CLI as often as you like. If you're denied, no clock is reset. (And if you deem a CLI offer to be too low, you can decline it without resetting the clock.) But they really like pay in full behavior. It's more likely that you could be up for a nice CLI once your balance is paid.

Discover would seem to be a good option for you. But I think you'll get a better offer from them once your balances are lower.

Re: Utilization question

Meanmchine — Fri, 28 Dec 2018 01:41:30 GMT

@Anonymous wrote:
Guys: I'd like to reduce my overall utilization ratios... I have about 3 cards ~ with relatively low CLs. about 3k each with high utilization 85-90%, and like 4-5 more cards at zero percent. overall utilization is around 41%. Main goal is to reduce overall utilization and avoid unneccessary HPs saving on interest would be nice but not a primary goal. Want to transfer as much of this balance with as little pulls, ideally onto one card. The 3 options I feel are viable are:

@1, Discover, I've heard is great for this especially since they do SPs for CLIs which I think is great. The pre-approval page shows 2 cards being pre-approved IT Cash, IT Core, but the balance transfer offer is only 6 months @ 10%, seems like a bad sign.
2. Ask for CL increase on, it just occured to me I should probably ask to increase my limits on atleast 2 of those cards which I plan to keep using. Chase Freedom (original) and Capital One Quicksilver, but intuitively it feels if my utilization is so high, it's probably not the best time to ask. Or... will they see I have a good amount of available credit on my other accounts? Also Chase is sending me pre-approvals for Saphire Preferred, Slate, and Freedom Un.
3. Credit Union, I've read they are more generous with SLs, especially NFCU for example, but no 0% offers. This could work but Ideally i'd prefer to skip this if possible. I much rather get a Discover or Citi, Amex...etc..

What do you guys reccommend? Avg score is 670 across the board and 2-3 almost expired HPs in each report.

Thanks in advance,

Im a little confused

If saving interest isnt your main goal, then I dont see a need to apply for new credit. Just pay your debt down

Re: Utilization question

Anonymous — Fri, 28 Dec 2018 03:20:48 GMT

@Meanmchine wrote:
@Anonymous wrote:
Guys: I'd like to reduce my overall utilization ratios... I have about 3 cards ~ with relatively low CLs. about 3k each with high utilization 85-90%, and like 4-5 more cards at zero percent. overall utilization is around 41%. Main goal is to reduce overall utilization and avoid unneccessary HPs saving on interest would be nice but not a primary goal. Want to transfer as much of this balance with as little pulls, ideally onto one card. The 3 options I feel are viable are:

@1, Discover, I've heard is great for this especially since they do SPs for CLIs which I think is great. The pre-approval page shows 2 cards being pre-approved IT Cash, IT Core, but the balance transfer offer is only 6 months @ 10%, seems like a bad sign.
2. Ask for CL increase on, it just occured to me I should probably ask to increase my limits on atleast 2 of those cards which I plan to keep using. Chase Freedom (original) and Capital One Quicksilver, but intuitively it feels if my utilization is so high, it's probably not the best time to ask. Or... will they see I have a good amount of available credit on my other accounts? Also Chase is sending me pre-approvals for Saphire Preferred, Slate, and Freedom Un.
3. Credit Union, I've read they are more generous with SLs, especially NFCU for example, but no 0% offers. This could work but Ideally i'd prefer to skip this if possible. I much rather get a Discover or Citi, Amex...etc..

What do you guys reccommend? Avg score is 670 across the board and 2-3 almost expired HPs in each report.

Thanks in advance,
Im a little confused
If saving interest isnt your main goal, then I dont see a need to apply for new credit. Just pay your debt down

Which part was confusing? Trying to lower my utilization ratios (to increase my credit score in a short amount of time) in the least amount of pulls....

Re: Utilization question

Anonymous — Fri, 28 Dec 2018 03:22:19 GMT

@HeavenOhio wrote:
I think that before applying, you should pay your cards down so they're each below the 48.9% threshold. To do that, bring them down to 47%. That'll keep the next month's interest payment from bumping you back over the threshold.

The exception to waiting would be if you went the Credit Union route. You could do that anytime. NFCU had 0% offers last January. I wonder if that's annual.

A Chase CLI (credit limit increase) request would have a pretty strong chance of denial and would result in one or two hard pulls. It would make sense to wait until your balances are in better shape. But if you want to roll the dice, you could. Just don't go into it with high expectations.

You can request a Capital One CLI as often as you like. If you're denied, no clock is reset. (And if you deem a CLI offer to be too low, you can decline it without resetting the clock.) But they really like pay in full behavior. It's more likely that you could be up for a nice CLI once your balance is paid.

Discover would seem to be a good option for you. But I think you'll get a better offer from them once your balances are lower.

This is great advice I think I'm going to go with the Credit Union route, thanks again.

Re: Utilization question

forestgreenrover — Fri, 28 Dec 2018 03:27:58 GMT

The BT part is at least somewhat confusing, as typically the idea behind a BT is primarily to save on interest and get the sucker(s) paid down.

Re: Utilization question

_NERD — Fri, 28 Dec 2018 03:40:33 GMT

@Anonymous wrote:
I'd like to reduce my overall utilization ratios...
Good plan, that'll raise for FICO scores.

I have about 3 cards ~ with relatively low CLs. about 3k each with high utilization 85-90%....
Seeking new credit isn't going to help. Changed behavior will.

Main goal is to reduce overall utilization and avoid unneccessary HPs ...
Request CLI's on your existing accounts, if it is a SP CLI request.

...saving on interest would be nice ...but not a primary goal.
...Paying in full is even better. ...Paying down your debt & then not carrying more than 1% should be your goal

Thanks in advance,
You're welcome!

See above. I've been in your position twice now since joining this community. The first time in 2015, then again in 2016 when I obtained access to more credit. My high balances wasn't the problem, it was my behavior.

You can have great income and not be credit smart. If I were in your shoes, I'd stop using credit cards altogether and start paying down the debt you already have. I wish I had done that my first time around here. Fortunately I changed my behavior and paid off what I consider to be a massive amount of revolving debt. I don't want to be in that position ever again. What sucked about handing over almost $20k to two credit card issuers last month wasn't the debt itself; it's that I spent so much money I already had in the bank (spent using credit cards instead) on stuff I didn't need. I failed to see that, right before my eyes, I was letting these banks I'm carrying balances with collect an insane amount of interest along the way.

If saving money on interest doesn't interest you (get it) and you just want to lower your aggregate utilization for FICO scoring performance, why do you want to do that? Are you buying a house in the next few months? If not, the best course of action (speaking from my own experience) would be to sock drawer the credit cards and not use them if you can't PIF your spend from now on, and pay off your existing balances.

Best of luck, and welcome to our community! It's great to have you here.

Re: Utilization question

Anonymous — Fri, 28 Dec 2018 04:48:19 GMT

@_NERD wrote:
@Anonymous wrote:
I'd like to reduce my overall utilization ratios...
Good plan, that'll raise for FICO scores.

I have about 3 cards ~ with relatively low CLs. about 3k each with high utilization 85-90%....
Seeking new credit isn't going to help. Changed behavior will.

Main goal is to reduce overall utilization and avoid unneccessary HPs ...
Request CLI's on your existing accounts, if it is a SP CLI request.

...saving on interest would be nice ...but not a primary goal.
...Paying in full is even better. ...Paying down your debt & then not carrying more than 1% should be your goal

Thanks in advance,
You're welcome!
See above. I've been in your position twice now since joining this community. The first time in 2015, then again in 2016 when I obtained access to more credit. My high balances wasn't the problem, it was my behavior.

You can have great income and not be credit smart. If I were in your shoes, I'd stop using credit cards altogether and start paying down the debt you already have. I wish I had done that my first time around here. Fortunately I changed my behavior and paid off what I consider to be a massive amount of revolving debt. I don't want to be in that position ever again. What sucked about handing over almost $20k to two credit card issuers last month wasn't the debt itself; it's that I spent so much money I already had in the bank (spent using credit cards instead) on stuff I didn't need. I failed to see that, right before my eyes, I was letting these banks I'm carrying balances with collect an insane amount of interest along the way.

If saving money on interest doesn't interest you (get it) and you just want to lower your aggregate utilization for FICO scoring performance, why do you want to do that? Are you buying a house in the next few months? If not, the best course of action (speaking from my own experience) would be to sock drawer the credit cards and not use them if you can't PIF your spend from now on, and pay off your existing balances.

Best of luck, and welcome to our community! It's great to have you here.

yes if you must know I am planning to buy a house very soon 2-3 months. Just got married had to use credit on some expenses. Income is great for the house, trying to raise credit score as much as possible to get a lowest rate possible on the mortgage without touching the down payment $$$....guess i should have elaborated?

Re: Utilization question

Meanmchine — Fri, 28 Dec 2018 04:52:18 GMT

Applying for new credit when you are mortgage hunting is a very bad idea. I suggest you visit the Mortgage boards here for more info

Re: Utilization question

Pikaboo-icu — Fri, 28 Dec 2018 05:06:44 GMT

@Anonymous wrote:

yes if you must know I am planning to buy a house very soon 2-3 months. Just got married had to use credit on some expenses. Income is great for the house, trying to raise credit score as much as possible to get a lowest rate possible on the mortgage without touching the down payment $$$....guess i should have elaborated?

Yes! It isn't that people here are nosey or just wanna be all up in your business.. It's that the advice offered will vary depending on your goals.

As Meenie posted, perhaps visit the mortgage board.. New credit is definitely NOT what you want at this point..

Re: Utilization question

forestgreenrover — Fri, 28 Dec 2018 05:22:22 GMT

Yeah, that's kind of a big deal. In this case, all you need is your middle mortgage score (is it 670ish, too?). Doing *anything* credit-related (apart from paying down your balances) right now will completely tank your chances.

By my math, sounds like you have around 8k cc debt on 19750 available. It's not great but not the end of the world either. Can't you knock that 8 down to, say, 5k in 3 months and not eat in to your down payment?

But no, if you really need to buy please, please, please don't seek credit!

Re: Utilization question

_NERD — Fri, 28 Dec 2018 05:34:55 GMT

@forestgreenrover wrote:
Yeah, that's kind of a big deal. In this case, all you need is your middle mortgage score (is it 670ish, too?). Doing *anything* credit-related (apart from paying down your balances) right now will completely tank your chances.

By my math, sounds like you have around 8k cc debt on 19750 available. It's not great but not the end of the world either. Can't you knock that 8 down to, say, 5k in 3 months and not eat in to your down payment?

But no, if you really need to buy please, please, please don't seek credit!

Would this apply to debt consolidation loans, in the OP's case?

Re: Utilization question

forestgreenrover — Fri, 28 Dec 2018 05:42:15 GMT

Given how tight the turnaround would be between applying for such a product and trying to secure a mortgage (60-90 days), I can not see how it wouldn't have an adverse impact. Especially considering we're talking about a relatively doable figure that needs to be knocked out.

Re: Utilization question

Meanmchine — Fri, 28 Dec 2018 05:49:47 GMT

The only thing I can think of is MAYBE getting added as an AU to a good account. Im not sure on this option but might be worth looking into. I have no idea how mortgage Fico scores this

Re: Utilization question

HeavenOhio — Fri, 28 Dec 2018 14:17:01 GMT

@Anonymous, the mortgage means a lot. As others have said, don't apply for anything until the mortgage has closed. Don't even join the Credit Union.

Allowing one's AoYA (age of youngest account) to reach a year in age is ideal as there's a nice scoring bump for that. Six months is second best. You won't have the nice score bump, but lenders won't be overly concerned about recent credit-seeking behavior.

The bottom line is that adding accounts and inquiries will lower your score. Your best alternative is to pay down your cards somewhat evenly. Get their balances down to 47% util. If you can reach 27%, that's better. 7% would be best.

Re: Utilization question

Anonymous — Sat, 29 Dec 2018 03:46:01 GMT

If saving Money on interest isn't a factor, then you should simply pay down the existing debt. Hit one card hard and heavy, them move to tehenst one and on and on. Applying for more CC is definitely not going to help with high util, you'd never secure a large enough CL to help in any way. And while applying for consolidation loan wouldn't look as bad, it's still credit seeking behavior right before a mortgage.

Alos, will you totally pay off this loan before you take out the Mortgage? If not, it will factor into your DTC on whether you can afford both payments.