Utilization what is best way to decrease?????

[traveler2005]

Hi

I am wondering which way is best to decrease my utilization, do I pay off completely several small cards at once, or 1 larger balanced card. Some of my cards are reporting over 90% so should I get all of my higher balanced cards down to 50% first then start chipping away at them a few at a time. I know that utilization is scored two different ways, by each card, and then total.

I know carrying high balances is bad. The reports I receive spec say that my card is over 90% utilized and that this is a red flag. Some of my cards carry low balance, some high,

Thanks is advance

[chnceit]

IMO I would pay off the small balances so I could focus to pay off the larger ones. But if your larger balances have high interest then pay them off first. 

[flan]

---

@traveler2005 wrote:

Hi

I am wondering which way is best to decrease my utilization, do I pay off completely several small cards at once, or 1 larger balanced card. Some of my cards are reporting over 90% so should I get all of my higher balanced cards down to 50% first then start chipping away at them a few at a time. I know that utilization is scored two different ways, by each card, and then total.

I know carrying high balances is bad. The reports I receive spec say that my card is over 90% utilized and that this is a red flag. Some of my cards carry low balance, some high,

Thanks is advance

---

The cheapest way is to pay the mininum on all the accounts, and pay as much as you can on highest interest rate account.  Once that's paid off, move to the next highest interest rate account.  It can be psychologically satistfying to pay off balances, which is why the popular finanical press often says pay the smallest balance first.  But economically, that makes sense only rarely.

It should go without saying that you stop making new charges on the accounts.

[myjourney]

---

@traveler2005 wrote:

Hi

I am wondering which way is best to decrease my utilization, do I pay off completely several small cards at once, or 1 larger balanced card. Some of my cards are reporting over 90% so should I get all of my higher balanced cards down to 50% first then start chipping away at them a few at a time. I know that utilization is scored two different ways, by each card, and then total.

I know carrying high balances is bad. The reports I receive spec say that my card is over 90% utilized and that this is a red flag. Some of my cards carry low balance, some high,

Thanks is advance

---

Pay them off from highest int% rate to lowest 

If you want better results post limits, int% rate and balances

[traveler2005]

would it help scores if I brought down the cards that do exceed the 90% to around 50% so that utilization on a single card is scored better, so it isn't considered maxxed out?

[myjourney]

---

@traveler2005 wrote:

would it help scores if I brought down the cards that do exceed the 90% to around 50% so that utilization on a single card is scored better, so it isn't considered maxxed out?

---

Yes it would help a little 

[traveler2005]

Thanks myjourney for all your help.

[SnackTrader]

+1 flan

Your scores will probably look better if you get the balances under 50%, but who cares about your scores if you are paying hundreds of dollars in interest every month. You should do what makes most financial sense, since your scores don't matter unless you are applying for new credit. And you probably shouldn't be applying for new credit because you have maxed out credit lines already.

High interest rates first.

[Walt_K]

To elaborate a bit further on what people are telling you, your credit score has no memory.  As an example, let's say your target utilization is 10%.  Once you reach it, you will have the same score no matter how you got there (all else being equal, e.g., no new derogatory marks).  You could pay the high utlization cards down to below 50%, then concentrate on your high APR cards, or you could start with the high APR cards, or you could deliberately max everything out and then pay your cards back down to 10%, and in all three scenarious, once you reach the 10%, you'd have the same score.

So assuming you aren't going to be looking for any credit in the meantime before you reach your goal, you shouldn't worry about your score.  You should do what will save you the most money.  The way to do that is to pay down the highest APR cards first.

If you do have a need to apply for something before you can get to your ideal utilization, then there may be reasons to pay your cards down differently.  Your score would benefit from not having cards at 90% utilization.  And you would benefit from not having balances on all or on a majority of your cards.  There could be scenarios where it would make sense to pay down some of the lower APR cards first.  For example, if you are near an interest break tier and you are looking at applying for a car/mortgage soon.  The better rate  you could get if you could juice your score up a few points, and consequently the savings you could realize over the life of the loan, may make it worthwhile to pay a little more in CC interest now in order to improve your scores.

[RushXTC]

someone told me to line all your accounts up from highest debt to lowest, and begin backwards... highest debt, pay minimum while you throw more than minimum at the low debts so you can pay off accounts faster, then when you're down to the high debt accounts, throw what you'd usually throw at the small ones to that, plus extra and you'll lower your UTI in no time.