Whats better in terms of util?

[themeggerz]

Is it better to have:

I am going with a payoff strategy.  I have a LOT of tradelines, but most are paid off.  

Is it better to have:

1. 5 cards at 50% util?

2. 3 cards at 30%, 1 at 50%, 1 near max?

3. Most cards paid off, but 1 near max?

I have 17 credit cards with 0 balances, and 5 cards with balances near max (0% financing promotions).

My overall utilization is approx 39%.
 

I am trying to have a strategy to stick to so I can maximize my credit score in August and buy a car for my husband when he comes home from Afghanistan

I appreciate all comments on this

[MarineVietVet]

First of all I thank your husband and you for your sacrifices!

Everyone's situation is different and there is no one size fits all approach to this but what seems to work well for most people is to have only one of their cards report a small (<9% of it's credit limit) balance each month and then pay in full before the due date. You can use it as much as you want during the month but what's important is the reported balance because for most cards whatever is reported on the monthly statement is what is used to calculate utilization for the month.

You might have to play around with the percentages for a few months to see what works best for you. Some people say that 1-3% utilization helps the most. For others it might be 5-9%. As I said it's not one size fits all.

On any other cards always try and have them report a zero balance each month. That doesn't mean you can't use them just make sure that the desired zero balance on these accounts is achieved several days before their statements post.

Along with individual and overall utilization, FICO also scores the number of all types of accounts reporting a balance.at any one time Making sure less than half of all your accounts report a balance helps most people.

Now this approach really isn't necessary if you're not looking to apply for any credit in the near future or unless you are trying to tweak your score for maximum effect but some folks do this as a hobby just to see how high they can get their score.

[themeggerz]

Thanks Marinevet He's a proud sailor and I'm proud to be his wife.

Unfortunately, I dont think I can swing paying everything off and leaving one card, as per the recommendation you generally make on this board.

I can afford to either pay them all down to about 30%..... pay off a few and leave the rest high util.... or spread it carefully...

[Creditaddict]

To add to other post:

Not only are Util. of each card and overall all cards taken but how many accounts have balances can also effect score so in your case if you can't pay them all off I would probably go the route of paying as many as you can completely off and having a couple close to limit vs. paying all to 30% but this is were you will get a lot of thoughts and experience on.  It's not a perfect science for all, it's a person to person result.  For me though it's been multiple accounts with high balances vs. most PIF that effects my score the most.

[Anonymous]

My kneejerk was pretty much what creditaddict said. 

If it were me (and it's not) I think I would vote for paying as many down to zero as possible.  So in your OP, it would be one almost maxed with the remainder at 0.

But I have no personal experience with this, so it's just a wild guess on my part.

FICO does count number of accounts with a balance -  as well as overall and individual utilization.  it's hard to know how your individual FICO will adapt to the different scenarios.  Hopefully someone who's actually tried this and has seen the impact will chime in.

Best wishes on getting things in order for that DH of yours.  And thanks to you both for your service!

[Creditaddict]

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@Anonymous wrote:

My kneejerk was pretty much what creditaddict said. 

If it were me (and it's not) I think I would vote for paying as many down to zero as possible.  So in your OP, it would be one almost maxed with the remainder at 0.

But I have no personal experience with this, so it's just a wild guess on my part.

FICO does count number of accounts with a balance -  as well as overall and individual utilization.  it's hard to know how your individual FICO will adapt to the different scenarios.  Hopefully someone who's actually tried this and has seen the impact will chime in.

Best wishes on getting things in order for that DH of yours.  And thanks to you both for your service!

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One last point of why I would want 1 balance vs. lets say 3.  If you pay $100 on 3, you don't see as much progress... when I see $300 on 1, I can see the balance moving!

[Anonymous]

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@themeggerz wrote:

Is it better to have:

1. 5 cards at 50% util?

2. 3 cards at 30%, 1 at 50%, 1 near max?

3. Most cards paid off, but 1 near max?

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When it comes to overall utilization, here's the thing, they are all the same thing. All 3 end up giving you the same amount of overall utilization no matter how you try to swing it, and I'm pretty sure we went over this already in a separate thread, but I also remember not too many people chiming in.

I don't know how individual utilization factors into the equation, and if I'm not mistaken, keeping all at 0% and just having the one maxed out, seems like it still gives you not as big of a boost. It's the NFCU card, correct?

It LOOKS better to have all at 0 and just 1 maxed out, but FICO doesn't take into account "looks" just raw numbers.

[themeggerz]

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@Anonymous wrote:

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@themeggerz wrote:

Is it better to have:

1. 5 cards at 50% util?

2. 3 cards at 30%, 1 at 50%, 1 near max?

3. Most cards paid off, but 1 near max?

---

When it comes to overall utilization, here's the thing, they are all the same thing. All 3 end up giving you the same amount of overall utilization no matter how you try to swing it, and I'm pretty sure we went over this already in a separate thread, but I also remember not too many people chiming in.

I don't know how individual utilization factors into the equation, and if I'm not mistaken, keeping all at 0% and just having the one maxed out, seems like it still gives you not as big of a boost. It's the NFCU card, correct?

It LOOKS better to have all at 0 and just 1 maxed out, but FICO doesn't take into account "looks" just raw numbers.

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Hi Frugal! Yes, I've put aside the money I can commit to this.  

I'm just trying to figure out if I should pay a couple cards off, or spread it.  I guess we'll see and I'll share the results  I plan to buy the car in August.

Thanks all!

[MarineVietVet]

I'm late with my reply but I will give my opinion for what it's worth. IMO the impact of having several or more cards maxed out or nearly maxed out is greater than the impact of having all of them reporting balances.

I believe what I would do is pay all of them down as far as possible. 30% utilization is pretty high but not terrible by any means. Once I had all of them at a level utilization then from that point forward I would concentrate all my efforts (and extra money) toward paying off those cards one by one. Whether you choose to pay off high interest accounts or lowest balance accounts first is up to you.

Paying off higher interest cards will save you more money but paying off lower balances first will mean having zero balances on all accounts faster.

Just my 2 cents.

[themeggerz]

Conveniently all these cards are at 0% interest so that does not come into play.

I think I am goin to pay them all down to 30% and then see if I can funnel more away and pay more.

I'm trying to do this so my husband won't notice