Util question

[haulingthescoreup]

You've made a great start. To wring the last few points out (besides the GW) here's what you do: only half of all open accounts should show balances (this includes SLs, car loans, etc as well as CC), and any revolving accounts should show under 10% on each.

So if you have, say 10 open tradelines, including installment, you only want 5 to report. Nothing you can do about installment --they're on their little schedule there --so, if you have 4 loans and 6 CC's, you can only let one CC report. If you have 3 loans, you can let 2 CC's report, and so forth.

So first PIF any cards with low balances, to get as few as possible with balances, and then start working on the remaining ones. I would PIF the remaining lower balances first in order to knock them off quickly, and then on however many are "allowed" to have balances, get them under 10%.

I allowed one extra card to report a $320 balance by mistake (it reported early, due to the holidays, I guess), making 5 of 8 reporting, and when I just now pulled my scores, TU had dropped 34 points!!! EQ dropped 4, and EX dropped 2. This is with 2% util!

So this business of only allowing half of your accounts to show balances may seem silly, but TU especially has a thing about this. If you can pull it off, I think it's worth it, since you're going for a big loan so soon. Good luck!

[sunrise]

WOW!!! Great advice, Hauling..!!!  Guess what I am going to be doing TODAY!!! (paying off HALF of my cc''s with low balances)  I will then get the rest paid to under 10% over the next 2 months. 

Ouch!! a 34 point hit, I bet you felt that one in the tummy! 

You mentioned installment loans are a different story, I have one...American General Finance..I owe $7,000...but, it reports $10,000 because they include interest. (bought a John Deere Riding mover for our 5 acres)  I want to pay $1,000 a month until it is paid off, so mtg. co. won't use it in dti.  So, is this hurting me having a high balance on it?  This is the only TL that I am not whittling down the balance, although I did just send them $1,000 last week.  Also, they don't post credit limit and balance....only balance. 

[sunrise]

BTW, Hauling....I noticed you have your util @ 2%....so, does this mean it is better to keep util under 3%...or anything under 10% util is all treated the same?  Thanks!!!

[haulingthescoreup]

I don't know what impact that is having on your scores. The util on installments is counted, but it's in a separate category from the revolving util that we all obsess over. Just keep throwing money at it, and it shouldn't be hurting much. And keep mowing those 5 acres!

It might be a slight negative if it falls into the category of "consumer finance loan", and from the name of the company, American General Finance, it sounds like it might. This type of loan counts against you slightly, but I don't know how much. I have one, too (Wells Fargo Finance), but I've never gotten snotty comments about it on my score reports, probably because they used up their available space for comments about lates, lol. But others have gotten a comment, so it does count somewhere.

I think it's dumb that they count these down, and there's no way that a consumer can tell on a report if it's a CFL, but the thinking is that they are often taken by people in tight credit spots, so their existence on your credit history is sort of a warning. Nothing you can do about it at this point, but just keep in mind that if you ever need a personal loan again, you'll do better to go through a credit union or something. And ask how they will code the loan, so it won't report as a CFL.

If you're already working with a lender, you might ask if it's an issue, but I really think that you'll be OK.

[haulingthescoreup]

---

@sunrise wrote:

@BTW, Hauling....I noticed you have your util @ 2%....so, does this mean it is better to keep util under 3%...or anything under 10% util is all treated the same? Thanks!!!

---

There was persistent speculation going around here several months ago that there was one more bump at under 5%, but I never saw and before-and-after scores to confirm this. I just keep my util low because I (try to) have only one card report, and it's a heck of a lot easier to pay off a low balance than a high. Also, my total revolving util is $52K, so it's easy to keep util down. Once I had $7 reporting, which was 1/100 of 1%, which was fun!

Anyway, I'm just a PIF'er, and I have to remember to allow one to report. (You can also get penalized for having NO revolving report, go figure.)

[sunrise]

Thank you so much for all the helpful info!!  I will post results as I see them, seeing others results are what keeps me going in this credit game....I luv the success stories!!  Can't wait till I am one of them!!    HAPPY NEW YEAR, EVERYONE......A TOAST TO ALL OF US....MAY WE ALL SEE 800'S

[haulingthescoreup]

---

@sunrise wrote:
HAPPY NEW YEAR, EVERYONE......A TOAST TO ALL OF US....MAY WE ALL SEE 800'S

---

I'll drink to that!