topic Re: Snowball Negatively Affecting My Score? in Understanding FICO® Scoring

Snowball Negatively Affecting My Score?

Anonymous — Fri, 13 Oct 2017 19:12:36 GMT

I recently went over 30% cc utilization and have been trying to pay it down, I was at 45% but I used the snowball method to drop it to 40% but I'm not seeing my score go up. Before my debt increased I was at 706 TU/ 683 EQ, currently at 675 TU/ 667 EQ. Considering opening up a cc for balance transfer with 0% apr to help pay off the debt without interest but I'm worried I'll be denied because i'm under 700. Also wondering if another hard inquiry will drop my score.

Some background:

Half my cards are at 0% utilization, one at 80% and a few in the 40-50%. Currently I am paying off the smaller ones and working my way to the higher one which is great for momentum, but is it hurting my score? My payment history is 100%, derogatory marks are 0, credit age 9 years, 38 open accounts, and 2 hard inquries (EQ has 5 but two are dropping off this month).

Thanks.

Re: Snowball Negatively Affecting My Score?

Kree — Fri, 13 Oct 2017 19:18:34 GMT

Is your credit age, oldest or the average age?

Re: Snowball Negatively Affecting My Score?

Anonymous — Fri, 13 Oct 2017 19:21:07 GMT

Average age

Re: Snowball Negatively Affecting My Score?

Sandman771 — Fri, 13 Oct 2017 19:22:01 GMT

There are several breaking points for UTI 9% 30% 50% and 90%. Not sure ont he highest one, but if you cross that one you are considered "maxed out" on that card and you take a ding.

Work on the one card with the highest UTI to maximize your score. They score you on overall UTI and also by individual UTI. Hope that makes sense?

Re: Snowball Negatively Affecting My Score?

Anonymous — Fri, 13 Oct 2017 19:25:54 GMT

It does makes sense, and I was afraid I was hurting my score by not paying off the 80% first.

Re: Snowball Negatively Affecting My Score?

Anonymous — Fri, 13 Oct 2017 19:28:16 GMT

Aggregate utilization matters but so does individual card utilization. Your 80% card is bringing you down for sure. Any aggregate over 40/50% is as well.

Re: Snowball Negatively Affecting My Score?

HeavenOhio — Fri, 13 Oct 2017 19:40:38 GMT

Are you using Credit Karma scores? If so, you might want to get your FICO8 scores to get a better indicator. You can get them with a $1 trial membership from CreditCheck Total. Cancel before the trial has ended.

If you're providing FICO scores, or if your FICO scores are in the range of the scores you've posted, you don't have a disaster on your hands, and you can pay in the manner that pleases you. Just don't expect a big increase until that card with 80% utilization has been paid down to a lower balance.

If scoring is what you're after, please post a list of your cards, their balances, and their limits. People here can offer specific advice about further paydowns.

Re: Snowball Negatively Affecting My Score?

Anonymous — Fri, 13 Oct 2017 19:56:21 GMT

Thank you! I'll sign up for the free trial, yes I am currently using Credit Karma.

Here my cards:

COMPANY | BALANCE | LIMIT

Amazon | $706 | $2,400

AEO | $0 | $1,800

Barclay Card | $4,433 | $8,700

BOA Card | $0 | $1,000

BR Card | $1,789 | $3,900

Capital One | $317 | $1,500

Capital One Quick | $0 | $750

Capital One GMC | $949 | $1,100

Credit One Visa | $0 | $850

Credit One Master | $0 | $800

Express | $0 | $500

HSN | $768 | $3,500

Loft | $546 | $1,210

Nordstrom | $1,140 | $2,000

Overstock | $555 $950

QVC Card | $1,321 | $3,600

VS | $0 | $970

Walmart | $0 | $1,500

Re: Snowball Negatively Affecting My Score?

Anonymous — Fri, 13 Oct 2017 20:21:07 GMT

Thank you for recommending CreditCheck Total! My Fico8 from them is 716, I"m thinking I will apply for the Discover It and do a balance transfer, this will save me in interest fees that I can keep using to pay down my debt.

Re: Snowball Negatively Affecting My Score?

Anonymous — Fri, 13 Oct 2017 20:43:53 GMT

Bear in mind that transfering the balance to the 0% card will involve a fee. A typical BT fee is 3%. If you think you will be paying off the 80% card soon, the BT card won't help you much. If you think it will take you several months, however, it is probably worth doing. Also worth observing that the first month or two you will be paying more in fees/interest than you pay now.

Re: Snowball Negatively Affecting My Score?

HeavenOhio — Fri, 13 Oct 2017 21:16:15 GMT

Your 80% card (actually 87%) has a relatively low balance. It's also close to exceeding the 88.9% threshold that would max it and decrease your score.

Maybe you want to snowball that one now. After that, go back to snowballing lower balances.

Re: Snowball Negatively Affecting My Score?

Anonymous — Fri, 13 Oct 2017 21:26:17 GMT

Discover sent me a promo of 0% APR on purchases and balance transfers for 14 months. Any balances I transfer by February won't have any fees but after that I believe it will be 3-5%. I'm thinking I transfer some of my 50-60% utilization that have large balances (4k, 2k, 1k) and pay off the 80% balance because it's only $900 and I can do that in 2 months. Then I can chip away at the Discover balance until it is in the 40% range and then continue my snowball payoff. What do you think?

Re: Snowball Negatively Affecting My Score?

HeavenOhio — Fri, 13 Oct 2017 21:47:42 GMT

You'd want to come up with the plan once you know your Discover card's limit. Definitely pay more than the minimum, though, as you want to show them that you intend to pay it off.

We don't know your APRs. You probably want to take those into consideration when you transfer balances. Then continue to snowball away.

Re: Snowball Negatively Affecting My Score?

Anonymous — Fri, 13 Oct 2017 21:48:14 GMT

Great idea. Sounds like you are thinking carefully about what's best for you. Good luck!

Re: Snowball Negatively Affecting My Score?

Sandman771 — Fri, 13 Oct 2017 21:53:46 GMT

I would definitely close the Credit One cards as son as I got my UTI back under control so that it wouldn't take a hit. You have enough prime banks that you don't need them and their associated fees. JMO

Also I'm not a Cap one guru but if you could combine those two into one decent card with the combined limit?? I'm just a simple guy. I don't need 12 cards. I have one that I want to replace but I'm at least three if not six months from leaving the garden to app for it. Next one I want is the Hilton Amex and I have a ways to go for that one. But I stay there a lot so I see the benefits for sure.

Re: Snowball Negatively Affecting My Score?

Anonymous — Fri, 13 Oct 2017 22:03:46 GMT

Totally agree, those cards served a purpose for getting me credit and they need to go asap. Like you said, once I lower my UTI I'll be cancelling them, I'll do the credit one's first and then end the cap one's once I get another card that has no foreign trans fees. I'm trying to raise my limits so I can minimize my cards. I'll keep the store cards for the discounts, but I want to keep them at $0.

Re: Snowball Negatively Affecting My Score?

jamie123 — Sat, 14 Oct 2017 00:56:25 GMT

@Anonymous wrote:
Thank you! I'll sign up for the free trial, yes I am currently using Credit Karma.

Here my cards:
COMPANY | BALANCE | LIMIT
Amazon | $706 | $2,400 CALL FOR CLI
AEO | $0 | $1,800
Barclay Card | $4,433 | $8,700
BOA Card | $0 | $1,000
BR Card | $1,789 | $3,900
Capital One | $317 | $1,500
Capital One Quick | $0 | $750
Capital One GMC | $949 | $1,100
Credit One Visa | $0 | $850
Credit One Master | $0 | $800
Express | $0 | $500 CALL FOR CLI
HSN | $768 | $3,500
Loft | $546 | $1,210
Nordstrom | $1,140 | $2,000
Overstock | $555 $950
QVC Card | $1,321 | $3,600
VS | $0 | $970 CALL FOR CLI
Walmart | $0 | $1,500 CALL FOR CLI

If you haven't called for a credit line increase for the cards that I marked above in the last 6 months, I might suggest that as a first step. You have a $0 balance on most of them except Amazon and Amazon can be generous. The cards that I marked usually won't do a HP to give you a CLI bump either. If they request an HP decline it and move onto the next card. There are two ways to reduce your UTI, pay your cards off or increase your credit lines. I suggest that you do both! You might get a pleasant surprise and end up with a good CLI or two. All they can say is no. It doesn't cost you anything except a short lived feeling of rejection and you can handle that! (We've all been there!)

Re: Snowball Negatively Affecting My Score?

Anonymous — Sun, 15 Oct 2017 18:23:44 GMT

This is great advice! Thank you.

Re: Snowball Negatively Affecting My Score?

SouthJamaica — Tue, 17 Oct 2017 12:40:04 GMT

@Anonymous wrote:
I recently went over 30% cc utilization and have been trying to pay it down, I was at 45% but I used the snowball method to drop it to 40% but I'm not seeing my score go up. Before my debt increased I was at 706 TU/ 683 EQ, currently at 675 TU/ 667 EQ. Considering opening up a cc for balance transfer with 0% apr to help pay off the debt without interest but I'm worried I'll be denied because i'm under 700. Also wondering if another hard inquiry will drop my score.

Some background:
Half my cards are at 0% utilization, one at 80% and a few in the 40-50%. Currently I am paying off the smaller ones and working my way to the higher one which is great for momentum, but is it hurting my score? My payment history is 100%, derogatory marks are 0, credit age 9 years, 38 open accounts, and 2 hard inquries (EQ has 5 but two are dropping off this month).

Thanks.

The snowball method isn't hurting your score, but it's not geared towards short term score improvement, it's geared towards getting rid of your debt.

If you want to focus on improving your score, your best bet would be to get the 80% card, and any others at 50% or better down to 49%, then get them down to 29%, then knock them off one by one.

Re: Snowball Negatively Affecting My Score?

Anonymous — Tue, 17 Oct 2017 12:55:35 GMT

OP, I noticed back in your first post that you said you had 100% payment history, but later on stated that you were using CK. CK stating that you have 100% payment history means that you've had no payment issues in the last 2 years, where FICO scoring considers at least the last 7 years. I just want to make sure that you have absolutely no negative payment history items on your credit report at all and that you're not just going by the "100% payment history" graphic that the CK fluff software is showing you.