topic Re: Maximizing FICO Score while saving on interest in Credit Cards

Maximizing FICO Score while saving on interest (UPDATED)

Jlu — Tue, 11 Mar 2014 19:51:56 GMT

Hey guys, need some advice from you pros.

Currently have 3 balances on 3 different accounts:

Barclaycard: $2100 (0% til this summer)

Walmart: $400 (0% til later this year)

CSP: $3500 (15.24% APR)

Total debt: $6000

It's got my utilization at ~20%.

I have a BT offer to transfer up to $5000 to my Discover More @ 0% for 12 months. Would it kill my score to pay $1000 off and take the leftover $5000 and completely max the Discover card? It would mean ALL my revolving accounts would be reporting a $0 balance except for 1 maxed out Discover reporting > 90% utilization on that single card.

What do you all think? Regardless I'm going to transfer the CSP to the Discover because of the APR.. but I figured I'd roll in most of the Barclays and pay off the rest.

Thoughts?

Re: Maximizing FICO Score while saving on interest

indiolatino61 — Mon, 10 Mar 2014 23:08:06 GMT

@Jlu wrote:
Hey guys, need some advice from you pros.

Currently have 3 balances on 3 different accounts:

Barclaycard: $2100 (0% til this summer)
Walmart: $400 (0% til later this year)
CSP: $3500 (15.24% APR)
Total debt: $6000

It's got my utilization at ~20%.

@I have a BT offer to transfer up to $5000 to my Discover More @ 0% for 12 months. Would it kill my score to pay $1000 off and take the leftover $5000 and completely max the Discover card? It would mean ALL my revolving accounts would be reporting a $0 balance except for 1 maxed out Discover reporting > 90% utilization on that single card.

What do you all think? Regardless I'm going to transfer the CSP to the Discover because of the APR.. but I figured I'd roll in most of the Barclays and pay off the rest.

Thoughts?

I believe that maxing out any card will temporarily hurt your score until the balance is paid down. Now, whether maxing out one card is better or worse for your FICO score than showing multiple cards with a balance is a YMMV sort of question. The only way to see how different parameters affect you personally is to try it out. For me, I got to 800 TU by having all my cards report $0, and one card report 8%. When I let it report 9%, my TU would not break 800. The best of luck to you.

Re: Maximizing FICO Score while saving on interest

longtime_lurker — Mon, 10 Mar 2014 23:21:56 GMT

@indiolatino61 wrote:
@Jlu wrote:
Hey guys, need some advice from you pros.

Currently have 3 balances on 3 different accounts:

Barclaycard: $2100 (0% til this summer)
Walmart: $400 (0% til later this year)
CSP: $3500 (15.24% APR)
Total debt: $6000

It's got my utilization at ~20%.

@I have a BT offer to transfer up to $5000 to my Discover More @ 0% for 12 months. Would it kill my score to pay $1000 off and take the leftover $5000 and completely max the Discover card? It would mean ALL my revolving accounts would be reporting a $0 balance except for 1 maxed out Discover reporting > 90% utilization on that single card.

What do you all think? Regardless I'm going to transfer the CSP to the Discover because of the APR.. but I figured I'd roll in most of the Barclays and pay off the rest.

Thoughts?

I believe that maxing out any card will temporarily hurt your score until the balance is paid down. Now, whether maxing out one card is better or worse for your FICO score than showing multiple cards with a balance is a YMMV sort of question. The only way to see how different parameters affect you personally is to try it out. For me, I got to 800 TU by having all my cards report $0, and one card report 8%. When I let it report 9%, my TU would not break 800. The best of luck to you.

Personally, I'd always go with the route that saves the most in interest, as FICO has no memory, and unless you're apping for something big in the near future, I'd say it's more valuable to go ahead and save the interest money!

Just my .02 though

Re: Maximizing FICO Score while saving on interest

indiolatino61 — Mon, 10 Mar 2014 23:52:30 GMT

@longtime_lurker wrote:
@indiolatino61 wrote:
@Jlu wrote:
Hey guys, need some advice from you pros.

Currently have 3 balances on 3 different accounts:

Barclaycard: $2100 (0% til this summer)
Walmart: $400 (0% til later this year)
CSP: $3500 (15.24% APR)
Total debt: $6000

It's got my utilization at ~20%.

@I have a BT offer to transfer up to $5000 to my Discover More @ 0% for 12 months. Would it kill my score to pay $1000 off and take the leftover $5000 and completely max the Discover card? It would mean ALL my revolving accounts would be reporting a $0 balance except for 1 maxed out Discover reporting > 90% utilization on that single card.

What do you all think? Regardless I'm going to transfer the CSP to the Discover because of the APR.. but I figured I'd roll in most of the Barclays and pay off the rest.

Thoughts?

I believe that maxing out any card will temporarily hurt your score until the balance is paid down. Now, whether maxing out one card is better or worse for your FICO score than showing multiple cards with a balance is a YMMV sort of question. The only way to see how different parameters affect you personally is to try it out. For me, I got to 800 TU by having all my cards report $0, and one card report 8%. When I let it report 9%, my TU would not break 800. The best of luck to you.
Personally, I'd always go with the route that saves the most in interest, as FICO has no memory, and unless you're apping for something big in the near future, I'd say it's more valuable to go ahead and save the interest money!

Just my .02 though

Oh...I totally agree that saving interest is the better route, but the OP was asking about FICO scoring also...which of course, as you point out, is only important when applying for new credit/HP CLI's.

Re: Maximizing FICO Score while saving on interest

MMB85 — Tue, 11 Mar 2014 00:15:30 GMT

@longtime_lurker wrote:
@indiolatino61 wrote:
@Jlu wrote:
Hey guys, need some advice from you pros.

Currently have 3 balances on 3 different accounts:

Barclaycard: $2100 (0% til this summer)
Walmart: $400 (0% til later this year)
CSP: $3500 (15.24% APR)
Total debt: $6000

It's got my utilization at ~20%.

@I have a BT offer to transfer up to $5000 to my Discover More @ 0% for 12 months. Would it kill my score to pay $1000 off and take the leftover $5000 and completely max the Discover card? It would mean ALL my revolving accounts would be reporting a $0 balance except for 1 maxed out Discover reporting > 90% utilization on that single card.

What do you all think? Regardless I'm going to transfer the CSP to the Discover because of the APR.. but I figured I'd roll in most of the Barclays and pay off the rest.

Thoughts?

I believe that maxing out any card will temporarily hurt your score until the balance is paid down. Now, whether maxing out one card is better or worse for your FICO score than showing multiple cards with a balance is a YMMV sort of question. The only way to see how different parameters affect you personally is to try it out. For me, I got to 800 TU by having all my cards report $0, and one card report 8%. When I let it report 9%, my TU would not break 800. The best of luck to you.
Personally, I'd always go with the route that saves the most in interest, as FICO has no memory, and unless you're apping for something big in the near future, I'd say it's more valuable to go ahead and save the interest money!

Just my .02 though

You don't get charged interest by having a balance reported. So, interest is completely irrelevant when talking about maximizing your FICO by having a balance reported. But, you of course have to make sure to pay it in full shortly after the statement cuts and the balance is reported.

Re: Maximizing FICO Score while saving on interest

longtime_lurker — Tue, 11 Mar 2014 00:26:12 GMT

@MMB85 wrote:
@longtime_lurker wrote:
@indiolatino61 wrote:
@Jlu wrote:
Hey guys, need some advice from you pros.

Currently have 3 balances on 3 different accounts:

Barclaycard: $2100 (0% til this summer)
Walmart: $400 (0% til later this year)
CSP: $3500 (15.24% APR)
Total debt: $6000

It's got my utilization at ~20%.

@I have a BT offer to transfer up to $5000 to my Discover More @ 0% for 12 months. Would it kill my score to pay $1000 off and take the leftover $5000 and completely max the Discover card? It would mean ALL my revolving accounts would be reporting a $0 balance except for 1 maxed out Discover reporting > 90% utilization on that single card.

What do you all think? Regardless I'm going to transfer the CSP to the Discover because of the APR.. but I figured I'd roll in most of the Barclays and pay off the rest.

Thoughts?

I believe that maxing out any card will temporarily hurt your score until the balance is paid down. Now, whether maxing out one card is better or worse for your FICO score than showing multiple cards with a balance is a YMMV sort of question. The only way to see how different parameters affect you personally is to try it out. For me, I got to 800 TU by having all my cards report $0, and one card report 8%. When I let it report 9%, my TU would not break 800. The best of luck to you.
Personally, I'd always go with the route that saves the most in interest, as FICO has no memory, and unless you're apping for something big in the near future, I'd say it's more valuable to go ahead and save the interest money!

Just my .02 though
You don't get charged interest by having a balance reported. So, interest is completely irrelevant when talking about maximizing your FICO by having a balance reported. But, you of course have to make sure to pay it in full shortly after the statement cuts and the balance is reported.

I understand, but he is talking about rolling a balance each month I believe, because otherwise it wouldn't matter the interest rates on the cards.

Re: Maximizing FICO Score while saving on interest

MMB85 — Tue, 11 Mar 2014 01:52:50 GMT

@longtime_lurker wrote:
@MMB85 wrote:
@longtime_lurker wrote:
@indiolatino61 wrote:
@Jlu wrote:
Hey guys, need some advice from you pros.

Currently have 3 balances on 3 different accounts:

Barclaycard: $2100 (0% til this summer)
Walmart: $400 (0% til later this year)
CSP: $3500 (15.24% APR)
Total debt: $6000

It's got my utilization at ~20%.

@I have a BT offer to transfer up to $5000 to my Discover More @ 0% for 12 months. Would it kill my score to pay $1000 off and take the leftover $5000 and completely max the Discover card? It would mean ALL my revolving accounts would be reporting a $0 balance except for 1 maxed out Discover reporting > 90% utilization on that single card.

What do you all think? Regardless I'm going to transfer the CSP to the Discover because of the APR.. but I figured I'd roll in most of the Barclays and pay off the rest.

Thoughts?

I believe that maxing out any card will temporarily hurt your score until the balance is paid down. Now, whether maxing out one card is better or worse for your FICO score than showing multiple cards with a balance is a YMMV sort of question. The only way to see how different parameters affect you personally is to try it out. For me, I got to 800 TU by having all my cards report $0, and one card report 8%. When I let it report 9%, my TU would not break 800. The best of luck to you.
Personally, I'd always go with the route that saves the most in interest, as FICO has no memory, and unless you're apping for something big in the near future, I'd say it's more valuable to go ahead and save the interest money!

Just my .02 though
You don't get charged interest by having a balance reported. So, interest is completely irrelevant when talking about maximizing your FICO by having a balance reported. But, you of course have to make sure to pay it in full shortly after the statement cuts and the balance is reported.

I understand, but he is talking about rolling a balance each month I believe, because otherwise it wouldn't matter the interest rates on the cards.

Ah. Thought he was talking about the old balance report trick. There is no benefit to carrying a balance beyond that point and have interest charges kick in.

Re: Maximizing FICO Score while saving on interest

Jlu — Tue, 11 Mar 2014 13:01:56 GMT

Thanks for the intelligent responses.

What I basically want to know is whether it is better from a FICO/Creditor-standpoint to see 2-3 cards with < 35% utilization or just 1 card with > 90% utilization. I have about $5000 debt that I can't (re: prefer not to) pay off but can roll into BT offers @ 0%.

I can have my CR say ONE of the following:

Option 1: All revolving credit cards $0 balance except for Discover reporting around 90% utilization.

Option 2: All revolving credit cards $0 balance except for Discover reporting around 30% utilization AND BoA reporting around 30% utilization.

Regardless of which option I choose my overall utilization is under 20%.

I'd be paying no interest in either scenario but WHICH scenario is better for scoring purposes and/or from a creditor point of view. I don't have any immediate crushes on CC's that I JUST HAVE TO HAVE in the near future but we all know how we one day can wake up one morning and say 'hey I really like that AMEX SPG card' LOL.

Re: Maximizing FICO Score while saving on interest

Jlu — Tue, 11 Mar 2014 13:09:33 GMT

Also slightly off topic (but hey, this is my thread).. but I'll keep you guys posted on this one ..it'd be my first AMEX since rebuilding my credit:

(Fingers SUPER crossed due the probability of backdating to 2005 if approved)

Re: Maximizing FICO Score while saving on interest

Jlu — Tue, 11 Mar 2014 14:53:29 GMT

I updated my scores today and applied for CLI's:

Chase Freedom $2000 pulled Experian - APPROVED $3000 (womp womp)

Discover More $5000 pulled Transunion APPROVED $10,000 (!!!!)

BoA 1-2-3 Visa $2500 pulled Transunion APPROVED $10,000 (!!!!)

Walmart GECRB $2000 SP'd Transunion - APPROVED $3000 (yay)
Amazon GECRB $5000 SP'd Transunion - APPROVED $7500 (yay)

Barclaycard Apple Visa asked for PC to Rewards - no go

A total of 7 phone calls netted me a $17,000 increase in my revolving credit!

Re: Maximizing FICO Score while saving on interest

SnackTrader — Tue, 11 Mar 2014 16:58:47 GMT

Why would you want to pay a BT fee on a balances that are 0%?

My thought is transfer the CSP balance if you can't pay it down and pay the other balances down until it is time for the interest to start on them. Hopefully by then you can get the balances paid off completely. In the meantime, put those cards away and start using a debit card. Rewards mean nothing when you are paying interest and BT fees for using those cards. Get your budget straight soon and by the time the other cards are done with 0%, you'll be good to pay them off.

Re: Maximizing FICO Score while saving on interest

Jlu — Tue, 11 Mar 2014 19:53:42 GMT

^ Thanks. I just transferred $3500 balance on CSP that was accruing interest to a 0% for 12 month BT promo from Discover.. cost $100 to do it but CSP's interest was like $60/month.. I've got til 7/14 on the $2000 Barclaycard balance. I am going to just pay off the $400 on walmart.

That way I have no interest accruing balances.

PRG status still 'In Progress'....

Re: Maximizing FICO Score while saving on interest (UPDATED)

Jlu — Tue, 11 Mar 2014 19:53:57 GMT

UPDATE: WOOOHOOOO!