Balance Micro-management Question

[Anonymous]

My current overall ultilization ratio is ~10-15%. But as I just got a 0% BT card, I am planning to transfer most of my balances to the new card. That would make the ultilization of that card to be around 60%. Will that hurt my score significantly? (7 cards <5%, 1 card >50%, 15% overall).

[Involver]

You're going to get dinged both for a high balance and for having a ton of cards reporting balances.

Any way you can BT all of that to the single card and pay it down?

[Anonymous]

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@Involver wrote:

You're going to get dinged both for a high balance and for having a ton of cards reporting balances.

Any way you can BT all of that to the single card and pay it down?

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I think I can just pay off the small balances on the low utilization ratio cards. For the BT card that carries high balance, I think I can pay it off in about a year.

If I understand you correctly, I should PIF before statement day so that they report $0 balance instead letting them carry a small balance?

[takeshi74]

How quickly do you think you can get the utilization down on the BT card?  When are you intending to apply for credit again?  If you can pay down quickly and if you're not applying then the short term ding probably isn't a big deal.

We can't tell you the exact impact as it's not just a matter of utilization on its own but your overall credit as well.  General recommendation is to not exceed 30% but, again, short term high utilization generally isn't an issue.  It's prologned high utiliztion that can lead to adverse action.

[racer-x]

I think the benefit of having accts with $0 balances outweighs the negative of having 1 account over 50% or even 80%.

I just PIF'd 4 of 10 accts that were carrying balances to $0 obviously, but also had  an existing account report 80% due to a CLD.  Current utiliz  18%.

All the alerts and balance changes happened literally on the same day and myFico EQ and EX jumped 29 and 31 pts respectively.

TU also went up 27 pts, but over a weeks time.

I have 20 revolvers, totalling $150K tutilization, 6 of 20 carrying balances.  Scores 700-720, 1 small paid collection 2010.  AAoA 2 yrs, 20-ish Inq's (8 from mortgage, 3 from CLI's), 3 auto loan totalling $32k

2 accts slightly less than 30%

1 acct at 35%

1 acct at 40%

1 acct at 50%

1 acct at 80%

[Anonymous]

After BT is done, the card will be at around 60%, and I am planning to pay maybe about 5% a month (pay off in a year).

Credit plan:

6-9 months: - SP CLI, especially on the BT card if I can

                      - transfer balance from Prosper (consumer finance loan, installment) to the BT card. The amount is about 40% of  the current CL of the BT card.

9-12 months: - Car lease. The reason I am trying to micro-manage my credit score.

Would you recommend me to do the installement loan -> BT card move after or before getting a car lease? It will ding my credit score as overall ultilization will increase from ~10% to ~20% and ultilization of the BT card will increase by 50%, but I heard that lenders usually don't like to see consumer finance loan on the credit report.

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@takeshi74 wrote:

How quickly do you think you can get the utilization down on the BT card?  When are you intending to apply for credit again?  If you can pay down quickly and if you're not applying then the short term ding probably isn't a big deal.

We can't tell you the exact impact as it's not just a matter of utilization on its own but your overall credit as well.  General recommendation is to not exceed 30% but, again, short term high utilization generally isn't an issue.  It's prologned high utiliztion that can lead to adverse action.

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[Anonymous]

I see. Thank you for your advice. I only have 8 cards. I will try to have at least 4 cards to report $0 balance each month. May be 2-3 cards small balances if I cannot avoid that from happening. And the BT card I will just let it be until I need to apply for car lease/new credit. The BT card will save me quite a bit on interest I would have to pay otherwise, so if it isn't on the verge of getting my other cards canceled or CLD, I will just let it be and does it magic :-)

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@racer-x wrote:

I think the benefit of having accts with $0 balances outweighs the negative of having 1 account over 50% or even 80%.

I just PIF'd 4 of 10 accts that were carrying balances to $0 obviously, but also had  an existing account report 80% due to a CLD.  Current utiliz  18%.

All the alerts and balance changes happened literally on the same day and myFico EQ and EX jumped 29 and 31 pts respectively.

TU also went up 27 pts, but over a weeks time.

I have 20 revolvers, totalling $150K tutilization, 6 of 20 carrying balances.  Scores 700-720, 1 small paid collection 2010.  AAoA 2 yrs, 20-ish Inq's (8 from mortgage, 3 from CLI's), 3 auto loan totalling $32k

2 accts slightly less than 30%

1 acct at 35%

1 acct at 40%

1 acct at 50%

1 acct at 80%

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