30 Day Lates?

[Anonymous]

I've been on a mission to raise my score (@698 TU and 718 EQ).  I have my utilization under 14%, however it's spread out among 8 CC's.  Also have mortgage and heloc.  Transunion is showing this at 10 accounts with balances being a bad thing.  I can pay off quite a bit more at this time (all the way to $0 although I know I'm not supposed to completely do that).  The bad is I have 8 accounts showing one to three 30 day lates.  Not that I couldn't pay them, bills just tended to sit in by bag until I got a call.  Learned my lesson and autpay everything now.  (Oh, and BofA screwed up my autopay on the most recent). 

So I need to keep showing a bunch of paid on time.  Do I pay off several of the 8 accounts?  Or should I keep them open and keep paying on time to show good on time payment?  At this point, I'm not sure what I can do short of waiting out the 30 day lates.

[RobertEG]

If the 30-lates are more than a couple of years old, they have probably lost most of their negative impact, as minor delinquencies.

For any farily recent lates, particularly if the account is still open and in good-standing, it would not hurt to shoot off some good-will letters to the creditors, and plead your case for earlier removal.

As for tweaking your percent util for max score, are you planning to apply for credit in the near future, and thus actually need your FICO score?

If not, your current util is, in my opinion, low enough such that it most likely wont raise any creditor eyebrows regarding a potential credit limit decrease, and is low enough such that if and when you need to actually use your score, you can do the under 9% on all accounts, with under half showing a balance.

Since, of all the FICO scoring categories, % uti has no historical memory, you can do your fine-tweaking a couple of months before any applications, and achieve the same results as you would if you did that fine-tweaking every month on every account.  Some have the time and inclination to do that, but not me.

[Duke-of-Earl]

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@RobertEG wrote:

...  you can do your fine-tweaking a couple of months before any applications, and achieve the same results as you would if you did that fine-tweaking every month on every account.  Some have the time and inclination to do that, but not me.

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Most of this post (not quoted) sounds very sensible to me.  But I have to disagree about the quoted "fine-tweaking" every month.

My $0.02:  I don't see any extra complexity there, and in fact I find it simpler to pay each card off just before the billing cycle closes.  Any CCC I would do business with will provide an online account listing, so I know the balance due a day or two before the closing date, and just pay it then.  I'm going to pay it later anyway.  (if I can't, that's a red flag that I'm getting in over my head, and my method  gives me an earlier warning.)

I feel this approach also makes my CRs present my financial position more accurately, since it's clear I'm not carrying any CC debt.  (I know, this doesn't affect my score.)

Then every three or four months, I wait a few days before paying off one card, so my report will "show recent use of a credit card".  It's important to pay it off a few days afterwards, and not wait for the due date.  Otherwise, you'll spend the money you didn't pay on last month's balance, and then get a double whammy later to get back on track.

My approach does require some up-front capital to get started.  But if that's a significant factor, maybe you're spending too much.

[RobertEG]

Whatever works for you!

Let me give an example of what I was talking about.  You go into a store to buy a $15 CD.  Putting it on a low CL card could drive the %util of that card up by 5% or more, putting that card well over 10%, and thus hurting the scoring of its individ util, while putting the same charge on a high CL card would not have the same result.  And walking into the store, do I know how many cards are reporting a balance, and thus decide to put it on a card that already has a balance in order not to increase the percent cards reporting a balance?  That is the kind of fine-tweaking one can do if so inclined......

[Anonymous]

Something I noticed in your replies.  The utilization on each individual card is important?  Is this true or is it the overall utilization?

[Anonymous]

I actually will need my credit score at some point in the next 6 months.  Will be purchasing a new/used car to replace an older minivan.  Is 698/718 going to be good enough to get approved and get a decent rate?  (I'll probably be putting the trade equity of at least 10K towards the purchase.  Should I go for under 9% on all cards prior to applying for that loan?  If that will push me up into the next bracket of good/very good, I'd be able to do that.

[llecs]

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@Anonymous wrote:

Something I noticed in your replies.  The utilization on each individual card is important?  Is this true or is it the overall utilization?

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It's both. Try maxing out one card and you can see the impact (or take my word for it). FICO also likes $0 balances on all but one account.

[Duke-of-Earl]

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@RobertEG wrote:

Whatever works for you!

Let me give an example of what I was talking about.  You go into a store to buy a $15 CD.  Putting it on a low CL card could drive the %util of that card up by 5% or more, putting that card well over 10%, and thus hurting the scoring of its individ util, while putting the same charge on a high CL card would not have the same result.  And walking into the store, do I know how many cards are reporting a balance, and thus decide to put it on a card that already has a balance in order not to increase the percent cards reporting a balance?  That is the kind of fine-tweaking one can do if so inclined......

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Thanks, I misunderstood what you meant by fine-tweaking.  I'm with you on not wanting to go there.  But my approach -- PIF just before the billing cycle closes -- is a good way to avoid it.  My util is always 0%, except for the occasional report I let go through so my cards won't be considered "dormant".  Walking into a store, the only thing I have to think about is which card is in that one- or two-day interim between making the payoff and the statement closing.  Even I can remember that for the four cards I carry.