Utilization - Better to Load Up on Few or Spread it Out to All CC??

[Anonymous]

Let me tell what works in my case. Over the past 4 years, I've worked hard at being my FICO score up after divorce. I started with a Parent Student Loan (40k) and one high limit VISA card paid down plus an over draft LOC on 2 checking accts. My score was 670ish.
After using the visa little to none, I applied for aCiti MC. I would make interest free balance transfers from visa to mc then try to pay off quickly. After 2 years, I applied for a Discover always moving the balance from one to another with 0 interest balance transfers. The new CC's would offer higher limits once balances were paid within a couple months.
Two years ago, I bought a new car making automatic payments. Last month I found I had finally made the magic FICO score of 761! Here's the kicker: I still have the full student loan to pay because I've been paying interest only for 6 years.
My goals now: pay small balances off moving my money to pay off the car, taking all that money to pay down the student loan in 5 years. BAM! = Excellent FICO.
Keep working toward your goals. BEST!

[titanofold]

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@Dinka381 wrote:
From what i have read an doing. It is best to try to keep your utility under 30%. That means all your cards combined. Add up you total credit limit for each card all together and subtract the total amount you owe. Again you want to keep your combine total of all cards under 30%.
Hope this helps

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Welcome to the forums!

For FICO scoring, the ideal is to have all but one CC report $0. The final CC you'll want to report between 1% and 9% of its CL. The optimum point is singular to the individual and will take some expirementing to find it. However, the utilization doesn't really matter much until you're going to apply for something as FICO has no memory of utilization.

It is better to keep utilization to a level that can be paid off within the month without impact to your finances, or at least be able to get the utilization down to the optimum level within the planned time frame. Of course, things do happen which don't allow us to do things optimally all the time.

[Alberio]

Sorry I am late to come back to the thread.  I don't have the results of this little experiment, but I will update when I do.  Someone asked what cards I have and they are a Discover, Bank of America MC, Citi MC, and AmEx.  I did pay off the entirety of my Discover card (~$6000) with a BT to the BoA card in part and payment from savings in part.  In total, my card balance went down about $3000 net because Discover went down $6K and BoA went up $3K.  I wanted to put the majority on the BoA card, but not max it out.  So I now have $0 balances on Citi and Discover, and balances on AmEx (which is steady decreasing with strong payments each month) and BoA.

The BoA reported to the credit agencies on the same day my statement cut, and my credit score went down 3 points.  I assume that is because they all still show me as owing $6K to Discover which is inaccurate.  Discover responded to the balance of $0 by upping my credit line by $1300 dollars, which will also help my util!  The problem is that although the statement reflecting the CLI and the $0 balance cut on the 4th of this month it has not reflected at the credit agencies.  My credit monitoring here has not yet notified me of the $6K decrease on my Discover card balance.

I did a search here and found that Discover often doesn't report to the agencies when it does a CLI/when there is a $0 balance/and when the card was not used the previous statement period.  So I asked them to do "off cycle reporting" to the agencies yesterday and they agreed.  I said that my husband and I are going to submit a mortgage application soon and I'd like my reports to be accurate and they had no problem doing it.  Also asked if I wanted a letter to show lenders about my balance and I said no thanks for now, just the accurate info to the agencies.  My score watch hasn't picked it up yet, but I hope it will come soon.  Then I will update with the result in case others are wondering what to do in this situation.  I will also continue to work toward pushing my total util down. 

FWIW, Discover's own provided FICO score shows an 11 point increase, but I am not sure if they take into account their own non-reported information in calculating that score, if that makes sense. 

[titanofold]

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@Alberio wrote:

Sorry I am late to come back to the thread.  I don't have the results of this little experiment, but I will update when I do.  Someone asked what cards I have and they are a Discover, Bank of America MC, Citi MC, and AmEx.  I did pay off the entirety of my Discover card (~$6000) with a BT to the BoA card in part and payment from savings in part.  In total, my card balance went down about $3000 net because Discover went down $6K and BoA went up $3K.  I wanted to put the majority on the BoA card, but not max it out.  So I now have $0 balances on Citi and Discover, and balances on AmEx (which is steady decreasing with strong payments each month) and BoA.

The BoA reported to the credit agencies on the same day my statement cut, and my credit score went down 3 points.  I assume that is because they all still show me as owing $6K to Discover which is inaccurate.  Discover responded to the balance of $0 by upping my credit line by $1300 dollars, which will also help my util!  The problem is that although the statement reflecting the CLI and the $0 balance cut on the 4th of this month it has not reflected at the credit agencies.  My credit monitoring here has not yet notified me of the $6K decrease on my Discover card balance.

I did a search here and found that Discover often doesn't report to the agencies when it does a CLI/when there is a $0 balance/and when the card was not used the previous statement period.  So I asked them to do "off cycle reporting" to the agencies yesterday and they agreed.  I said that my husband and I are going to submit a mortgage application soon and I'd like my reports to be accurate and they had no problem doing it.  Also asked if I wanted a letter to show lenders about my balance and I said no thanks for now, just the accurate info to the agencies.  My score watch hasn't picked it up yet, but I hope it will come soon.  Then I will update with the result in case others are wondering what to do in this situation.  I will also continue to work toward pushing my total util down. 

FWIW, Discover's own provided FICO score shows an 11 point increase, but I am not sure if they take into account their own non-reported information in calculating that score, if that makes sense. 

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If the score says FICO, it is calculated the way it's calculated everywhere else: It's based on what's reported to your CRs and nothing else. They maybe using a card enhanced score, which is still based on what's reported to the CRs, but that would be about it.

Congrats on the CLI!