topic Balance Transfer to decrease per card utilization? in Understanding FICO® Scoring

Balance Transfer to decrease per card utilization?

heather123 — Sun, 16 Dec 2018 22:52:33 GMT

Hello. Looking for some guidance on how FICO mortgage scores calculate please, and any advice on how I can get a decent boost from maybe transferring some of my utilization....

I am currently at 618 TU (11/02/18), 653 EQ (12/16/18), 656 EX (11/02/18) for the FICO 5,4,2 scores. Two of my cards have CLI that will be posting with their next reporting update (one Macy’s store card increased $1200, one PNC visa increase $4500). I also have a payment that will post on my Discover card that will reduce overall utilization further. So with the CLIs and that payment about to report, overall utilization will be around 18%. I have 3 cards that have $0 balance. (Also one charge card with $0, but not sure if that counts for much.)

My cards are:

Credit one (rebuilder): 0/1000 = 0%

Cap one (rebuilder): 0/750 = 0%

amex gold charge: 0/0 = 0%

american airlines advantage: 0/1000 = 0%

cap one: 1381/2800 = 49%

amex: 611/1000 = 61%

pnc: 1144/9500 = 12%

discover: 837/2900 = 29%

macys: 240/2000 = 12%

amazon: 344/5000 = 7%

(I also have a car note that is half paid off and a student loan still close to its initial balance because I consolidated last year.)

What I am wondering, for FICO mortgage scoring, would there be any benefit in transferring a balance of $611 to my pnc card to bring my Amex to $0 and have one more card reporting with $0 balance? That would bring PNC to 18%.

I have been reading that the mortgage scoring model takes into account individual util as well as overall... I am running low on cash to throw at these, but recognize that Cap One and Amex both need to be addressed. Suggestions welcome.

I’m actively looking for homes and aiming for February closing. I am preapproved already (since October), but want to try to get a better interest rate on the final pull. I don’t think 660 is impossible, would like to get to 680...

It has been a long road to get here (my FICO 8 scores were all 540 range about 4 years ago, now they are 690s!), so I do have “new” credit working against me in all the scoring models (youngest account is ~4 months; average age of all is 5 years).

Thank you in advance for support and advice!

Re: Balance Transfer to decrease per card utilization?

sjt — Sun, 16 Dec 2018 23:07:33 GMT

@heather123 wrote:
Hello. Looking for some guidance on how FICO mortgage scores calculate please, and any advice on how I can get a decent boost from maybe transferring some of my utilization....

I am currently at 618 TU (11/02/18), 653 EQ (12/16/18), 656 EX (11/02/18) for the FICO 5,4,2 scores. Two of my cards have CLI that will be posting with their next reporting update (one Macy’s store card increased $1200, one PNC visa increase $4500). I also have a payment that will post on my Discover card that will reduce overall utilization further. So with the CLIs and that payment about to report, overall utilization will be around 18%. I have 3 cards that have $0 balance. (Also one charge card with $0, but not sure if that counts for much.)

My cards are:

Credit one (rebuilder): 0/1000 = 0%
Cap one (rebuilder): 0/750 = 0%
amex gold charge: 0/0 = 0%
american airlines advantage: 0/1000 = 0%
cap one: 1381/2800 = 49%
amex: 611/1000 = 61%
pnc: 1144/9500 = 12%
discover: 837/2900 = 29%
macys: 240/2000 = 12%
amazon: 344/5000 = 7%

(I also have a car note that is half paid off and a student loan still close to its initial balance because I consolidated last year.)

What I am wondering, for FICO mortgage scoring, would there be any benefit in transferring a balance of $611 to my pnc card to bring my Amex to $0 and have one more card reporting with $0 balance? That would bring PNC to 18%.
I have been reading that the mortgage scoring model takes into account individual util as well as overall... I am running low on cash to throw at these, but recognize that Cap One and Amex both need to be addressed. Suggestions welcome.

I’m actively looking for homes and aiming for February closing. I am preapproved already (since October), but want to try to get a better interest rate on the final pull. I don’t think 660 is impossible, would like to get to 680...

It has been a long road to get here (my FICO 8 scores were all 540 range about 4 years ago, now they are 690s!), so I do have “new” credit working against me in all the scoring models (youngest account is ~4 months; average age of all is 5 years).

Thank you in advance for support and advice!

Balance transfer is essentially moving debt around. The best thing is to get your debt down. I would get Cap One and Amex below 30%.

Re: Balance Transfer to decrease per card utilization?

heather123 — Sun, 16 Dec 2018 23:24:17 GMT

Thank you, SJT. I have painstakingly paid these down by thousands already. I can pay about another $500 toward them in the next month or so, but I recognize that won’t make much of a dent for both... So I was thinking $500 toward cap one (get util around 30ish %) or leave Cap One as is and pay to Amex (bring util to 11%). That gets neither to zero balance.

My question is about moving the debt around. What is the per card utilization and number of cards with $0 balance that the mortgage scoring model likes to see? If I can move debt to end up with 18% util on one card and a $0 on the other AND the scoring model likes to see $0 balance open accounts...maybe it’s not the worst idea. Then I would pay a few hundred toward cap one to lower utilization somewhat.

If zero balance cards don’t matter for scoring, I won’t bother transferring. Just looking for a quick boost from having another $0 balance card, assuming that provides a boost. Does it?

thanks,

Heather

Re: Balance Transfer to decrease per card utilization?

sjt — Sun, 16 Dec 2018 23:38:11 GMT

You can pay $300 to Amex to bring it down to 30% and $200 to CapOne to bring it too 49%. That should boost your score a bit.

Re: Balance Transfer to decrease per card utilization?

Anonymous — Mon, 17 Dec 2018 01:24:39 GMT

@heather123 wrote:
Just looking for a quick boost from having another $0 balance card, assuming that provides a boost. Does it?

It's profile specific, but in your case the chances of bringing another card to $0 or even more than 1 unless it involves the aggregate utilization crossing of 8.9% overall utilization isn't going to be significant. It depends on how you define "boost" IMO. I personally think any point shifts around (say) 5 points are extremely insignificant. That's what I think you're looking at here in the proposed plan to move debt around. Maybe you gain a couple of points, maybe you don't. Overall, simply not worth it IMO. It's sort of like rearranging deck chairs on the Titanic. Take the money you'd spend on the BT and simply put it toward one of your balances. That's my feeling on it, anyway.

Re: Balance Transfer to decrease per card utilization?

HeavenOhio — Mon, 17 Dec 2018 02:43:34 GMT

You'd likely gain the most by getting all of your cards down below the 28.9% threshold. You'll want to pay those cards down to 27% so the next month's interest doesn't knock you back over the threshold.

Your proposed balance transfer and $625 toward Capital One would accomplish that. Consider that another option would be to pay $625 toward Capital One and $341 to AMEX. That gets you to 27% on both cards, but it doesn't reduce the number of accounts with balances.

Trying to prognosticate the benefit eliminating one account with a balance is a crapshoot. The best guess is that little or nothing would happen. In comparison, a gain for crossing two thresholds for individual account utilization is fairly predictable and could yield a pretty nice result.