topic Re: cc balances in Understanding FICO® Scoring

cc balances

chefd2 — Thu, 23 Aug 2012 16:56:30 GMT

Hello,

I have a question for the board. I currently have 5 ccs

20000.00 0 Bal

5000.00 0 bal

3800.00 0 bal

25000.00 15000.00 bal

25000.00 18000.00 bal

I have 20000.00 dollars that i am going to pay towards the outstanding balances. What is my best option to raise my scores?

Thanks in Advance

Re: cc balances

Anonymous — Thu, 23 Aug 2012 16:54:22 GMT

@chefd2 wrote:
Hello,

I have a question for the board. I currently have 5 ccs
20000.00 0 Bal
5000.00 0 bal
3800.00 0 bal
25000.00 15000.00 bal
25000.00 1800.00 bal

I have 20000.00 dollars that i am going to pay towards the outstanding balances. What is my best option to raise my scores?

Thanks in Advance

so in total you have a balance of $16,800. what i would do is pay down the one with the highest interest rate and leave like a hundred bucks on the other. These last 2 months ive been playing around with my Utilization and found that what everybody on this forum says is true, in that when you leave a small balance on one card ~1% your fico score will be higher then having 0% util.

Re: cc balances

chefd2 — Thu, 23 Aug 2012 16:55:30 GMT

sorry that last cc should read 18000.00 bal

Re: cc balances

j_casteel — Thu, 23 Aug 2012 16:57:20 GMT

If i had over 16k in cc debt. and 20k to put towards it....then i wouldn't need to come online asking for help on what to do.

the answer is pretty obvious. Pay the entire debt off and have the extra for savings, investment, or what have you.

Re: cc balances

tcbofade — Thu, 23 Aug 2012 16:59:35 GMT

I think this will end up being a "what works best for YOU" situation.

If it were me, I'd pay off one card completely, then pay as much as possible on the other.

Re: cc balances

j_casteel — Thu, 23 Aug 2012 17:00:45 GMT

@chefd2 wrote:
sorry that last cc should read 18000.00 bal

ok that makes a little more sense

like mentioned, you wanna try to get rid of as much of the higher interest debt. you can first

Re: cc balances

Anonymous — Thu, 23 Aug 2012 17:03:51 GMT

OP, how long to pay off rest of debt? Also, any credit events coming up (ie applying for credit)?

Re: cc balances

chefd2 — Thu, 23 Aug 2012 17:07:49 GMT

Yea I want to refinance. Probably can pay off rest in 6-8 months

Re: cc balances

SpiceIslander — Thu, 23 Aug 2012 17:59:18 GMT

@chefd2 wrote:
Hello,

I have a question for the board. I currently have 5 ccs
20000.00 0 Bal
5000.00 0 bal
3800.00 0 bal
25000.00 15000.00 bal
25000.00 18000.00 bal

I have 20000.00 dollars that i am going to pay towards the outstanding balances. What is my best option to raise my scores?

Thanks in Advance

I would decide based on the interest rate and pay off the higher one first and put the rest to the other one. If the rates are the same, I'd pay 8k on the 4th and 12k on the last one.

Re: cc balances

Anonymous — Thu, 23 Aug 2012 18:19:54 GMT

I would get both of the cards to just below 30% utilization. Put the rest of the money (not much left) to the higher interest rate. Then in the remaining months, keep both cards below 30% and pay down the higher interest rate one. You will probably get most lift from FICO that way.

Re: cc balances

youngandcreditwrthy — Thu, 23 Aug 2012 23:20:47 GMT

Yeah, I think both cards need to be at least below 50% util, then maybe take a VACATION! :-) LOL

and of course, higher interest rate gets paid first, and def try to do a BT to a card like Chase Freedom or Slate; they usually have 0% for 15 months.

Per Suze Orman, it's also very important to have six to eight months' worth of expenses saved!

best of luck!

Re: cc balances

Roarmeister — Fri, 24 Aug 2012 02:24:40 GMT

I don't disagree with the idea of putting part of the money towards savings / emergency expenses. It depends a lot on the OP's other financial status and what their savings are currently like. That said, $20k is a nice tidy sum to be able to throw at your debt which should "warm your cockles" nicely!

Unless you are applying for additional credit right away, I'd say it is immaterial whether you bring the utilization below a certain level or not. I would work on what's best for your financial position, period. That usually means paying the highest interest card first. If they have the same rate then pay them down to an equal amount of utilization. If you choose to set aside some funds for savings then I would consider 10%. You may also consider tithing or giving to the church & charity if you are religious.

I just noticed in another post of yours that you are planning to refinance in 6 months. So my advice above still works. But in 4 months time, try to get both cards with balances down to equal utilization amounts or better yet down to zero. Then it will take 1 full cycle to report from the vendors to the CRAs and at that time you should get the maximum FICO score benefit. Good luck.