What is my best strategy for optimized UTL...

[bott6698]

Hi Guys, You have all been such a great help to me and I am in the position now where instead of my scores sucking for bad credit they are sucking because of too much credit.... Not hard to change though but would like your expert advise on what is the best attack plan here to make my scores increase.

I will have about $1,600.00 to pay off some balances and want to choose best method. I have no collections/CO and 6 lates on 11 year history and last late was 11 months ago. I have no lates on any of the credit cards.

My current scores are EQ 625  TU 576  EX 569 

Home depot card $1,000.00 CL  $944 used

Kay $3,000 CL $1,200 used

Macy $400 CL $505 used (they dropped my CL automatically so made me over limit)
Zales $500 CL $300 used

Toys R US $500 CL $487 used
Orchard $320 CL $318 used
Best Buy $320 CL $310 used

I figured I could knock all CC's down to 50% with $1314.00 and spend another $320.00 and pay off 

my orchard and best buy cards because they are so small...

What do you guys think my best strategy would be to boost my score some?

Message Edited by bott6698 on 12-31-2008 03:08 PM

[Anonymous]

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@bott6698 wrote:

Hi Guys, You have all been such a great help to me and I am in the position now where instead of my scores sucking for bad credit they are sucking because of too much credit.... Not hard to change though but would like your expert advise on what is the best attack plan here to make my scores increase.

I will have about $1,600.00 to pay off some balances and want to choose best method. I have no collections/CO and 6 lates on 11 year history and last late was 11 months ago. I have no lates on any of the credit cards.

My current scores are EQ 625  TU 576  EX 569 

Home depot card $1,000.00 CL  $944 used

Kay $3,000 CL $1,200 used

Macy $400 CL $505 used (they dropped my CL automatically so made me over limit)
Zales $500 CL $300 used

Toys R US $500 CL $487 used
Orchard $320 CL $318 used
Best Buy $320 CL $310 used

I figured I could knock all CC's down to 50% with $1314.00 and spend another $320.00 and pay off 

my orchard and best buy cards because they are so small...

What do you guys think my best strategy would be to boost my score some?

Message Edited by bott6698 on 12-31-2008 03:08 PM

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It depends on what your goal is.  If your goal is for the best FICO range, then get all your cards under 50%, if you can spare more, get them all under 35%, and continue until they're all under 10%.  

If your goal is to save as much money as possible, and pay as little in interest as possible, then you should pay off/down those balances with the highest interest rate.   So if you have a card whose individual util is only 5%, but it is at 30% interest, you will be better off paying that one, money wise, than you would if you paid off a card whose individual util may be 85%, but whose interest rate is only 10%

[bott6698]

Thanks woopah to answer your question I am strictly looking to raise my fico's...

Ya Jan 15th will put 1600 towards all and the next month another 500 etc. But wanted to see

what was best strategy for quickest increase in scores..

[jmbfl]

If you have $1,600 to apply to this project now pay off as many of the cards as possible in full. The two major components of the UTIL calculation that you can influence with your money now are: 1) The total utilization of revolving credit as a percentage of available revolving credit and 2) the number of revolving accounts reporting a balance. You will be best served to bring your number of accounts reporting a balance down to the lowest possible number and then bringing the balances down on those few accounts. Individual account UTIL does matter, but mainly with the account issuer and other issuers. What matters to FICO is total UTIL and proportion of accounts reporting balances. Goal is to have less than 50% of revolving accounts report a balance.

Message Edited by jmbfl on 12-31-2008 04:47 PM

[Anonymous]

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jmbfl wrote:
If you have $1,600 to apply to this project now pay off as many of the cards as possible in full. The two major components of the UTIL calculation that you can influence with your money now are: 1) The total utilization of revolving credit as a percentage of available revolving credit and 2) the number of revolving accounts reporting a balance. You will be best served to bring your number of accounts reporting a balance down to the lowest possible number and then bringing the balances down on those few accounts. Individual account UTIL does matter, but mainly with the account issuer and other issuers. What matters to FICO is total UTIL and proportion of accounts reporting balances. Goal is to have less than 50% of revolving accounts report a balance.

Message Edited by jmbfl on 12-31-2008 04:47 PM

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Goal is to have less than 50% of ALL accts reporting a balance.

[jmbfl]

Actually it is:

1) Less than half of your revolving lines, and

2) Half or less of all TL's (revolving + installment + mortgage).

[haulingthescoreup]

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bott6698 wrote:

My current scores are EQ 625  TU 576  EX 569 

94%  Home depot card $1,000.00 CL  $944 used
40%  Kay $3,000 CL $1,200 used
126%  Macy $400 CL $505 used (they dropped my CL automatically so made me over limit)
60%  Zales $500 CL $300 used
97%  Toys R US $500 CL $487 used
99%  Orchard $320 CL $318 used
97%  Best Buy $320 CL $310 used

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OK, these payments will get all your high-util cards to 49%:

$454 to Home Depot

  $55 to Zales

$242 to Toys R Us

$162 to Orchard

$154 to Best Buy

$1067

+ 505 to Macy's (they're probably chasing your balance)

$1572

Sounds like you've planned this out pretty well! (from your second post.) I'd do the above, and then with subsequent available cash, pay off the lowest-balance cards first, to maximize the number of cards with $0 balances. Then take the others down to 19%, then 9%, and so forth.

That's for scoring purposes, of course. Otherwise, I'd go after the highest interest first, along with maybe killing off a comparatively low balance for morale's sake.

eta: for those who were able to post while I was trying to use my laptop calculator, I should say that I went with the above tactic based on the promise (assumption) that there would be continued paydowns after the first big one. So I'm looking at best score improvement over a period of three or four months, say, not for max improvement after one month.

Message Edited by haulingthescoreup on 12-31-2008 05:37 PM

[bott6698]

Very Cool info here thanks. Ya I had 600cl with macy's and never missed a payment but because my utl has gotten worse my fico has gotten worse and macy's automatically scores you each month and I was so upset when I found they just dropped my CL because of that when I have been nothing but good to them. Thanks a lot guys

[bott6698]

Here are my results as I said I would post them when I pulled new scores from changing UTL. Ok Bare in mind this is including maxed out LOC 20k and maxed out HELOC 17k so results are fluctuated and because of my balances not posting quite what I paid on them because of missing cut offs I guess some are still above the 49% I was striving for.

You can see my increase in scores in my sig and my new balances reflecting those new scores are the following:

HD $503   $1000 CL
Kay $1104  $3000 CL
Macy $202  $400 CL
Zales $251  $500 CL
Toys R US $246 $500 CL
Best Buy $189 $320 CL
Orchard $177 $320 CL
CJ $0  $2500 CL

 Now I need to see what actually does happen once I get these to exactly 49% since some fell still above that line and then next step will be 29% etc