topic Strategy advice needed to increase score in Understanding FICO® Scoring

Strategy advice needed to increase score

Anonymous — Wed, 07 May 2014 13:33:13 GMT

What is the best strategy to increase my scores?

Pay off a installment car loan $5,000/$14,000?
Reduce util on my boa card $4,800/6,000?
Reduce util on my disc card $5,500/$6,000?

All other cards have similar credit limits and don't have any balances or very small ones.

Overall util 30%

Scores in my sig pulled here yesterday.

Re: Strategy advice needed to increase score

EW800 — Wed, 07 May 2014 13:52:35 GMT

I am not an expert in this area, as I too am trying to get scores up, however I would think bringing down the UTIL on the two cards would be your best bet. It is my understanding that having different "types" of trade lines works to your advantage, so depending on your profile, paying off the car loan may not be your best option. I have found that getting credit card UTIL under 10% can be very healthy.

Re: Strategy advice needed to increase score

avggoal700 — Wed, 07 May 2014 13:56:16 GMT

Just be careful if you make a big payment to pay down your cc, some people report that the cc company sometimes will lower your credit limit after that (CLD).

Re: Strategy advice needed to increase score

Anonymous — Wed, 07 May 2014 15:40:20 GMT

@Anonymous wrote:
What is the best strategy to increase my scores?

Pay off a installment car loan $5,000/$14,000?
Reduce util on my boa card $4,800/6,000?
Reduce util on my disc card $5,500/$6,000?

All other cards have similar credit limits and don't have any balances or very small ones.

Overall util 30%

Scores in my sig pulled here yesterday.

Reduce DIscover then BOA.

If you have the funds, pay them off after reducing them.

FICO utilization scoring looks at both overall and individual utilization, and both cards are maxed out or nearly so.

Revolving utilization is more important than installment utilization.

Re: Strategy advice needed to increase score

Involver — Wed, 07 May 2014 15:39:09 GMT

Yep, that Discover is hitting you twice for high util and for being maxed out. You'll want to address that first.

Re: Strategy advice needed to increase score

gh17 — Wed, 07 May 2014 22:38:14 GMT

Yep. The car loan is in good shape (possibly even better shape than if it were completely paid off to 0 - although paying it down/off is obviously good for the sake of saving on interest). Credit card utilization has a way bigger effect on your score. You're dinged a little, but not a lot, for high balances on loans, simply because the loan is always going to start out at 100% (whereas with credit cards, you're not encouraged to use the whole limit). You should probably pay down Discover first, then BofA, then the loan (although always make at least minimum payments on all). Also, don't feel like you need to completely pay off one thing before starting on the other. Two cards less than 50% utilization is probably (guessing) better than one card 20% and one card 80%.

Also keep the interest rates on the cards in mind. It almost certainly makes more sense in terms of saving money to pay down the credit cards before the loans unless you have a crazy high rate loan or a crazy low rate card.