topic Re: Help with UT IL ? in Credit Cards

Help with UT IL ?

Rlandon87 — Mon, 04 Aug 2014 19:59:12 GMT

OK I have about 7k cash to pay down balances on my CC'S.

I know this is impossible to know for sure but what is the best way to apply the 7000 on these card balances for the biggest FICO boost. I'm not worried about the interest rate or financial standpoint of things, strictly what will be the most feasible to attain the most FICO points.

11680/12000-
2800/3000-
4400/4500-
2700/3000
580/800
2900/3000
1100/1600
1800/2000

My thoughts were to eliminate as many balances as possible, but what if I applied the amount across all cards and brought as many as possible below 80%?

Re: Help with UT IL ?

Rlandon87 — Mon, 04 Aug 2014 20:00:46 GMT

If you are wondering why I have so much cc balances, I was recently married. We charged the ring, wedding, and honeymoon due to 0% offers and benefits.

I will have the money to pay all cards off within 18 months. I just need the quickest boost possible for obtaining a morgtage.

Re: Help with UT IL ?

Skye12329 — Mon, 04 Aug 2014 20:01:34 GMT

Personally i would eliminate the smaller balances first only because its less payments to worry about. However it would be smarter to eliminate the higher APR cards first unless you have 0% for X amount of months.

Re: Help with UT IL ?

Rlandon87 — Mon, 04 Aug 2014 20:07:59 GMT

Most are 0% highest that's not 0% is 17.99.

I'm looking for biggest FICO boost, I know however I apply the money the overall utilization will have the same effect.

What I want to know is how much better is it to have all cards under 80%, or pay off two high balance cards, or pay off multiple small balances so I only have 3 cards reporting high balances.

I will have about 15k more to apply over the next 6 months... but I want to make the largest FICO jump possible now.

Re: Help with UT IL ?

hizzaah — Mon, 04 Aug 2014 20:33:56 GMT

If you're not worried about interest, pay as many down to zero as possible.. Can't say how much of a boost you'll get, but that's what I'd do. Some are 90%+ which is considered maxed which won't help, but I don't know that you'll get more points from paying all of them down a few %.

Re: Help with UT IL ?

destine2grow — Mon, 04 Aug 2014 20:36:55 GMT

I am not sure if paying the smaller balances off first will boost your score more or spreading the 7k out across all credit cards.

I personally would pay all small balances first. I think it looks better to have some cards at 0 balance rather than spreading the money out.

I also think it will motivate you ( not that you are not motivated) to contribute reducing your cc debit. I also think it will feel more rewarding! Good luck with whatever you decide.

Re: Help with UT IL ?

Rlandon87 — Mon, 04 Aug 2014 20:44:47 GMT

I'll go with paying as many off as I can, I'll let you know what it does to the scores.
Right now I'm at

EX- 638
TU-646
EQ-627

Re: Help with UT IL ?

destine2grow — Mon, 04 Aug 2014 20:47:35 GMT

Look forward to the update!

Re: Help with UT IL ?

SusieQ — Mon, 04 Aug 2014 21:21:25 GMT

I was in a similar situation recently. I first paid against any that were over 89% utilization to get them out of maxed out. I then started paying lowest to highest balance.

Reducing the maxed out ones gave me the biggest jump in score, followed by zero balances on a few others.

Hope this helps.

Re: Help with UT IL ?

xerostatus — Mon, 04 Aug 2014 21:32:05 GMT

I myself would probably pay off across all cards, in weighted amounts. The reasoning would be, to lower both the overall and individual util across the board, as I do recall there being some word about keeping util under around 90% to avoid getting the "maxed out card" designation.

Based on your numbers, I ran it through a quick excel analysis (I get bored at work =X):

Current Bal	Limit	Current Utilization	New Balance	Payment Needed
$ 11,680.00	$ 12,000.00	97%	$ 8,400.00	$ 3,280.00
$ 2,800.00	$ 3,000.00	93%	$ 2,100.00	$ 700.00
$ 4,400.00	$ 4,500.00	98%	$ 3,150.00	$ 1,250.00
$ 2,700.00	$ 3,000.00	90%	$ 2,100.00	$ 600.00
$ 580.00	$ 800.00	73%	$ 560.00	$ 20.00
$ 2,900.00	$ 3,000.00	97%	$ 2,100.00	$ 800.00
$ 1,100.00	$ 1,600.00	69%	$ 1,100.00	$ 0.00
$ 1,800.00	$ 2,000.00	90%	$ 1,400.00	$ 400.00

			TOTAL PAYMENT	$ 7,050.00

(very simplified analysis, I think SusieQ's suggestion might be better, first and foremost bring down the "maxed out" balances down under 90%, then zero out the lower balances then whatever may or may not be left over can be used to paydown the remaining higher balances)

[Edited for some math errors]

Re: Help with UT IL ?

destine2grow — Mon, 04 Aug 2014 21:29:17 GMT

@xerostatus wrote:
I myself would probably pay off across all cards, in weighted amounts. The reasoning would be, to lower both the overall and individual util across the board, as I do recall there being some word about keeping util under around 90% to avoid getting the "maxed out card" designation.

Based on your numbers, I ran it through a quick excel analysis (I get bored at work =X):

Current Bal Limit Current Utilization Balance req. for goal util of 66% Payment Needed
$ 11,680.00 $ 12,000.00 97% $                  7,920.00 $ 3,760.00
$    2,800.00 $    3,000.00 93% $                  1,980.00 $     820.00
$    4,400.00 $    4,500.00 98% $                  2,970.00 $ 1,430.00
$    2,700.00 $    3,000.00 90% $                  1,980.00 $     720.00
$        580.00 $        800.00 73% $                     528.00 $        52.00
$    2,900.00 $    3,000.00 97% $                  1,980.00 $     920.00
$    1,100.00 $    1,600.00 69% $                  1,056.00 $        44.00
$    1,800.00 $    2,000.00 90% $                  1,320.00 $     480.00

TOTAL PAYMENT $ 6,930.00

Can you enlighten me on the bol text. This is the first I am hearing of it. This is good to know. Thanks in advance.

Re: Help with UT IL ?

xerostatus — Mon, 04 Aug 2014 21:37:40 GMT

@destine2grow wrote:
Can you enlighten me on the bol text. This is the first I am hearing of it. This is good to know. Thanks in advance.

Any balances above 90% in individual account utilization is often viewed as being "maxed out", which would drag down your scores in some way or another. It is often said that this harms your score at a greater weight than otherwise.

i.e.

if you have two cards, $500 each, and you have a $450 balance on one of them.

Then your util would be:

450/500 = 90%

0/500 = 0%

Total: 450/1000 = 45%

The better scenario, solely for scoring purposes, is to spread the balance to avoid the 90% individual util:

225/500 = 45%

Total: 450/1000 = 45%

Re: Help with UT IL ?

destine2grow — Mon, 04 Aug 2014 21:39:51 GMT

@xerostatus wrote:
@destine2grow wrote:
Can you enlighten me on the bol text. This is the first I am hearing of it. This is good to know. Thanks in advance.

Any balances above 90% in individual account utilization is often viewed as being "maxed out", which would drag down your scores in some way or another. It is often said that this harms your score at a greater weight than otherwise.

i.e.
if you have two cards, $500 each, and you have a $450 balance on one of them.
Then your util would be:
450/500 = 90%
0/500 = 0%
Total: 450/1000 = 45%

The better scenario, solely for scoring purposes, is to spread the balance to avoid the 90% individual util:
225/500 = 45%
225/500 = 45%
Total: 450/1000 = 45%

Thank you again! I am still learning and will keep this in mind.

Re: Help with UT IL ?

RBFool — Mon, 04 Aug 2014 21:46:25 GMT

@destine2grow wrote:
@xerostatus wrote:
I myself would probably pay off across all cards, in weighted amounts. The reasoning would be, to lower both the overall and individual util across the board, as I do recall there being some word about keeping util under around 90% to avoid getting the "maxed out card" designation.

Based on your numbers, I ran it through a quick excel analysis (I get bored at work =X):

Current Bal Limit Current Utilization Balance req. for goal util of 66% Payment Needed
$ 11,680.00 $ 12,000.00 97% $                  7,920.00 $ 3,760.00
$    2,800.00 $    3,000.00 93% $                  1,980.00 $     820.00
$    4,400.00 $    4,500.00 98% $                  2,970.00 $ 1,430.00
$    2,700.00 $    3,000.00 90% $                  1,980.00 $     720.00
$        580.00 $        800.00 73% $                     528.00 $        52.00
$    2,900.00 $    3,000.00 97% $                  1,980.00 $     920.00
$    1,100.00 $    1,600.00 69% $                  1,056.00 $        44.00
$    1,800.00 $    2,000.00 90% $                  1,320.00 $     480.00

TOTAL PAYMENT $ 6,930.00

Can you enlighten me on the bol text. This is the first I am hearing of it. This is good to know. Thanks in advance.

You keep this up I'll send you some spreadsheets I have to complete by the end of the week!

Super good job on the calculations!

Re: Help with UT IL ?

Anonymous — Mon, 04 Aug 2014 21:49:21 GMT

@SusieQ wrote:
I was in a similar situation recently. I first paid against any that were over 89% utilization to get them out of maxed out. I then started paying lowest to highest balance.

Reducing the maxed out ones gave me the biggest jump in score, followed by zero balances on a few others.

Hope this helps.

This was some helpful info. Thanks!

Re: Help with UT IL ?

Anonymous — Mon, 04 Aug 2014 22:24:43 GMT

@Rlandon87 wrote:
OK I have about 7k cash to pay down balances on my CC'S.

I know this is impossible to know for sure but what is the best way to apply the 7000 on these card balances for the biggest FICO boost. I'm not worried about the interest rate or financial standpoint of things, strictly what will be the most feasible to attain the most FICO points.

11680/12000-
2800/3000-
4400/4500-
2700/3000
580/800
2900/3000
1100/1600
1800/2000

My thoughts were to eliminate as many balances as possible, but what if I applied the amount across all cards and brought as many as possible below 80%?

Congratulations on the new marraige! At this point, i don't see how you can receive much of a FICO boost of anything more than maybe a few points. From talking to credit analysts, anything over 80% is considered maxed. Anything over 60% they really don't like to see. At the moment, you have balances of $27,960/$29,900= 94%

After the 7k payment, can you pay that much monthly between you and your husband? I think that paying off as many as you can might give you more of a score boost than taking them down to 80% because you're getting hit per account being maxed, and for your over all credit having many cards with maxed balances.

It looks like you can pay these off:

2700/3000
580/800

1100/1600
1800/2000

That will cost $6180 and pay off 50% of your cards. Then you can apply the remaining $820 to the card you owe $2800/3000 on bringing that account to $1980/3000 = 66%

I think that if you're looking for a score boost, that might help the most. If you're looking at a home though, I don't know what the lender would tell you, so you might want to ask your questions in the Mortgage sub forum. I don't know that you'll get enough of a boost from any of this to get into that 640-680 range needed, but I might be wrong!

Another good thread to join is this one: The GREAT CC Payoff Challenge!!

Best wishes to you!

Re: Help with UT IL ?

Rlandon87 — Mon, 04 Aug 2014 23:03:58 GMT

Those aren't the only cards I hold, I have a total credit limit of approximately 55k. My total utilization is 73%.

Loan officer told me to just get utilization to under 50% total, credit score over 640 and we would be good.

Now I'm torn between paying off multiple accounts or spreading the love to all of them and bringing them all down under maxed out...

I can afford 2000 a month towards payments. The issue isn't the long run, it's the next 60 days to get this loan pushed through. Financially I am stable, the only reason I have high balances are due to taking advantage of 0% and the high cost of giving my DW a nice wedding...

I'm a guy BTW ; )

Re: Help with UT IL ?

Rlandon87 — Mon, 04 Aug 2014 23:06:23 GMT

That chart is nice, thanks Xero

Re: Help with UT IL ?

Rlandon87 — Mon, 04 Aug 2014 23:15:09 GMT

Re: Help with UT IL ?

Rlandon87 — Mon, 04 Aug 2014 23:16:27 GMT

Based upon that newly found knowledge I will pay all cards below "maxed out"

I will report back to this thread in a month with results... and anyone feel free to keep updating this thread with knowledge/advice.