topic Re: questions about utilization. in Understanding FICO® Scoring

questions about utilization.

Anonymous — Mon, 18 Mar 2013 16:01:39 GMT

Hello, I am currently looking for some advice on how to proceed..

Currently I have three credit cards;
TD secured card; Balance 0; Limit 600
Discover; Balance 1200; Limit 2000 (0% interest)
Best Buy; Balance 275; Limit 700 (0% interest)

My credit score was 690 but is down to a 646 because of my high balances. This is annoying me because the reason I am keeping balances is two of the cards are zero interest. I don't like seeing my credit score so low.. So I need some advice on what to do? I plan on closing my secured card and I guess I'll need to pay some balances down.. Keep in mind I have the money to pay these cards and have NEVER missed a payment on any credit account. However I like to take advantage of the 0% option. It keeps more money in my pocket which I like because I own a small seasonal business. (Coming into season!)

My main issue is why is my score penalized so much just because of balances! Does my credit score being so low hurt my chances of future credit? In other words can someone look back at these scores? I guess my best option is just pay them down below 30%?

Thanks for any advice.

Re: questions about utilization.

Anonymous — Mon, 18 Mar 2013 16:06:10 GMT

Short term looks bad if you were to apply for something now. Long term if you pay each card down passed 10% util will make you look good though. No late payments!!!

Re: questions about utilization.

Anonymous — Mon, 18 Mar 2013 16:10:01 GMT

I don't plan on applying for anything in the next few months or year for that matter. So should I just gradually pay them down? Or just chuck the cash at it to get them down right away? Will someone be able to tell that at one point I had such high balances or no?

Re: questions about utilization.

Anonymous — Mon, 18 Mar 2013 16:11:26 GMT

I guess it comes down to whether you are going to use your credit in the near future or not. As pointed out, útil does not affect your credit in the long term. Just make sure to pay those balances below 9%, which is usually what optimizes your score the most, before applying for anything. You will see your score go up instantaneously as if you never had that debt there.

Re: questions about utilization.

Anonymous — Mon, 18 Mar 2013 17:27:55 GMT

Since you said you arent planning on apping for anything go ahead and pay them slowly but if you have the cash around pay them off before you buy uneccessary things; that's just responsible spending 101

Re: questions about utilization.

youngandcreditwrthy — Mon, 18 Mar 2013 18:49:03 GMT

Just pay more than the minimum...
Maybe pay enough each month to ensure pif before 0% ends...
Your score will rebound, no doubt.

Re: questions about utilization.

bradpitt — Mon, 18 Mar 2013 19:19:50 GMT

Your question is about utilization history.

Utilization history doesn't at all come into effect under computer approval since your fico is only a snapshot of your present situation.

But utilization history could come into effect under manual review. No one knows for sure how much if any utilization history effects a decision.

I would think it would be only relevant if you were caring balances over 70% for a long time or were thinking of a mortgage in the next year or two. Otherwise I doubt they would even look at it even if you were borderline. But in my opinion its probably best not to even carry balances above 50% so you don't spook any of your lenders and make sure you get it paid down to all but one card with balances around 1-2% a couple months before you apply for anymore credit.

Re: questions about utilization.

Anonymous — Tue, 19 Mar 2013 00:43:30 GMT

@Anonymous wrote:
I don't plan on applying for anything in the next few months or year for that matter. So should I just gradually pay them down? Or just chuck the cash at it to get them down right away? Will someone be able to tell that at one point I had such high balances or no?

If you are not going to apply for anything, your score does not matter. Cash availability is more important, pay the minimum.

Re: questions about utilization.

Anonymous — Tue, 19 Mar 2013 00:45:10 GMT

@bradpitt wrote:
Your question is about utilization history.
Utilization history doesn't at all come into effect under computer approval since your fico is only a snapshot of your present situation.
But utilization history could come into effect under manual review. No one knows for sure how much if any utilization history effects a decision.
I would think it would be only relevant if you were caring balances over 70% for a long time or were thinking of a mortgage in the next year or two. Otherwise I doubt they would even look at it even if you were borderline. But in my opinion its probably best not to even carry balances above 50% so you don't spook any of your lenders and make sure you get it paid down to all but one card with balances around 1-2% a couple months before you apply for anymore credit.

There is no utilization history in your credit report so it can not be used in a manual review.