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FICO looks at both individual and overall utilization. So even if your overall utilization is 5%, if you have one card that's maxed out, which this one will be, you will still see a ding in your scores.
The amount of the ding depends on what else you have going on in your credit reports, and how high your scores are. Negative things affect higher scores more and lower scores less.
By maxing out one of your cards you may see adverse reaction from one of your other creditors, CLD'ing you or rate jacking you, possibly as an extreme closing your other credit cards. Closing and CLD'ing you will affect your overall utilization and may lower your score further.
However, even though a high FICO score is important, as you pay down your balance your utilization will improve and your FICO score will continue to go up. You can see by my scores that my FICO's have continued to go up, and the only thing changing on my reports is things aging, as all things do, and my utilization improving.
So should you tansfer the balance, well that's a decision only you can make. But I know I maxed out several cards doing BT's trying to pay less interest and pay debt off faster, so unless there's a specific loan or a mortgage you're trying for and you need those FICO's as high as possible, perhaps saving the money and paying the debt off faster is more important to you.
OP - that 6K on a closed acct is an even bigger utilization-killer, I think. This, combined with the 23+% you're paying interest, would lead me to BT the balance to your other card.
This is my opinion only, ymmv.
Good luck!
@ma_fico wrote:OP - that 6K on a closed acct is an even bigger utilization-killer, I think. This, combined with the 23+% you're paying interest, would lead me to BT the balance to your other card.
This is my opinion only, ymmv.
Good luck!
Not exactly correct. The reported balance and the reported CL count in the UTIL calculation in the same way whether the account is open or closed. As long as you owe one cent on the closed account the full reported CL will count in the UTIL calculation. As soon as the closed account is PIF it totally falls out of the UTIL calculation, but will remain on your CBR's (presuming it is a positive account) for 10 years after last activity. The big problem here is the interest you are paying. Do what you have to do to minimize your interest payments - but be mindfull that a decision to max out one particular card may backfire and result in another of your issuers taking AA against you. I would avoid taking any card above 70% UTIL. (50% ideally.) In terms of FICO calculation overall UTIL counts more that individual UTIL so shifting the debt toward the minimum number of cards should help you there.
You do need to make immediate and substatials steps toward paying your balances down - they are too high.
Thanks for your information. I figured up that my CL is $35K on all cards combined. This doesn't include the CL that the closed account had. I believe that it was $7200. With this account closed I figured the CL of $7200 was not figured in the CL, because it isn't available. Is this correct thinking?
My combined balances of everything is $17K which does include the $5900 on the closed account. This should figure to be 49% Utilization. I'm trying to get this down to below 40% within the next month by paying about $3500. I'm not sure how this will affect my FICO Scores by doing so. I wanted to take advantage of the 5.99% APR the best that I could, so I wanted to put $8K on the $12500 card with zero balance and bring down the 23% APR account to 50% of its current balance. I know that this would show almost 65% Utilization on the 5.99%card, but hopefully save me tons in interest. Where should I then apply the $3500 payment to best help my FICO? Should I apply this to the 23% and pay off leaving the 65% Utilization on the other card or split the $1750 between the two cards bring the 5.99% to 50% Utilization?
Thanks so Much!
12/08 TU 706
EX 704
EQ 698
Annual Salary $145K
@Anonymous wrote:Thanks for your information. I figured up that my CL is $35K on all cards combined. This doesn't include the CL that the closed account had. I believe that it was $7200. With this account closed I figured the CL of $7200 was not figured in the CL, because it isn't available. Is this correct thinking?
My combined balances of everything is $17K which does include the $5900 on the closed account. This should figure to be 49% Utilization. I'm trying to get this down to below 40% within the next month by paying about $3500. I'm not sure how this will affect my FICO Scores by doing so. I wanted to take advantage of the 5.99% APR the best that I could, so I wanted to put $8K on the $12500 card with zero balance and bring down the 23% APR account to 50% of its current balance. I know that this would show almost 65% Utilization on the 5.99%card, but hopefully save me tons in interest. Where should I then apply the $3500 payment to best help my FICO? Should I apply this to the 23% and pay off leaving the 65% Utilization on the other card or split the $1750 between the two cards bring the 5.99% to 50% Utilization?
Thanks so Much!
12/08 TU 706
EX 704
EQ 698
Annual Salary $145K
No! That is not correct. Please reread my preceding post.
To correctly advise you I would need to see a table of all TL's both installment and revolving. (Gotta keep it simple for me to wrap my mind around.) If you stick with what I have already said you will be fine.