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Have money to pay CC's but need help determining which ones

AverageJoesCredit
Community Leader
Mega Contributor

Re: Have money to pay CC's but need help determining which ones

I would go option one since you know you are going to get another 10k in Aug and thats only 3 months away. Best of luck and my sympathies for the loss of your father.
Message 11 of 30
Thomas_Thumb
Senior Contributor

Re: Have money to pay CC's but need help determining which ones


@Barneygirl wrote:

So which option would be best in this situation:

1. 15 cards, 3 at $0, 12 at 30% or less
Or
2. 15 cards, 11 at $0, 3 under 30%, and one at 67%

Neither option is best.

1) You want 50% or more cards reporting a zero balance (8 cards in your case). Another reported threshold that some see for cards reporting is 33%. I don't see it but, assuming your profile would, then drop # cards reporting a balance to 5 as funds permit.  

2) Individual cards that report a balance are best kept under 29% utilization

3) It is NOT the quantity of cards over a particular threshold that matter, it is the highest individual card utilization and aggregate utilization that are scored.

4) Want to get/maintain aggregate utilization under 9%.

 

So, best bet - from a strictly Fico score perspective - would be 8 cards at zero balance with the other 7 cards all under 29% utilization.Next best thing is 8 cards at 0 balance and remaining 7 cards all reporting balances under 49% utilization. Another good option isd 10 cards at 0 balance with the remaining 5 all under 49% if funds allow.

 

Again, it is not the quantity of cards above a particular threshold (aside from a majority at zero) but rather the highest individual UT%.

Fico 9: .......EQ 850 TU 850 EX 850
Fico 8: .......EQ 850 TU 850 EX 850
Fico 4 .....:. EQ 809 TU 823 EX 830 EX Fico 98: 842
Fico 8 BC:. EQ 892 TU 900 EX 900
Fico 8 AU:. EQ 887 TU 897 EX 899
Fico 4 BC:. EQ 826 TU 858, EX Fico 98 BC: 870
Fico 4 AU:. EQ 831 TU 872, EX Fico 98 AU: 861
VS 3.0:...... EQ 835 TU 835 EX 835
CBIS: ........EQ LN Auto 940 EQ LN Home 870 TU Auto 902 TU Home 950
Message 12 of 30
Em71
Frequent Contributor

Re: Have money to pay CC's but need help determining which ones

I am no Fico scoring expert, but I would pay off any meany as I could and pay down the reset as you wrote above.  That will save you money in interest and put you with less accounts with balances.  Just my $.02 worth.

Message 13 of 30
SouthJamaica
Super Contributor

Re: Have money to pay CC's but need help determining which ones


@Barneygirl wrote:
South.Jamaica....

So which option would be best in this situation:

1. 15 cards, 3 at $0, 12 at 30% or less

Or

2. 15 cards, 11 at $0, 3 under 30%, and one at 67%

Obviously I think #2 is better, which is why I recommended it.

Message 14 of 30
medicgrrl
Valued Contributor

Re: Have money to pay CC's but need help determining which ones

Personally, I don't think it matters a lot. You're going to pay them down or off based on these scenarios. In July you'll see the score change from your efforts and then you'll pay them off in August. If you were looking at long term goals it would be different. Since you're only carrying the balances a couple of more months, I would be more concerned with CLD's as was stated, and not scores.


EQ 778 EXP 782 TU 729
Message 15 of 30
Barneygirl
Frequent Contributor

Re: Have money to pay CC's but need help determining which ones


@Thomas_Thumb wrote:

@Barneygirl wrote:

So which option would be best in this situation:

1. 15 cards, 3 at $0, 12 at 30% or less
Or
2. 15 cards, 11 at $0, 3 under 30%, and one at 67%

Neither option is best.

1) You want 50% or more cards reporting a zero balance (8 cards in your case). Another reported threshold that some see for cards reporting is 33%. I don't see it but, assuming your profile would, then drop # cards reporting a balance to 5 as funds permit.  

2) Individual cards that report a balance are best kept under 29% utilization

3) It is NOT the quantity of cards over a particular threshold that matter, it is the highest individual card utilization and aggregate utilization that are scored.

4) Want to get/maintain aggregate utilization under 9%.

 

So, best bet - from a strictly Fico score perspective - would be 8 cards at zero balance with the other 7 cards all under 29% utilization.Next best thing is 8 cards at 0 balance and remaining 7 cards all reporting balances under 49% utilization. Another good option isd 10 cards at 0 balance with the remaining 5 all under 49% if funds allow.

 

Again, it is not the quantity of cards above a particular threshold (aside from a majority at zero) but rather the highest individual UT%.


 

Okay, I worked the numbers a bit and here's what I can get it to......

 

 Credit LimitAmount OwedAmount to PayAmount RemainingCurrent UtilizationFuture Utilization
 130012311231094.69%0.00%
 20001827125057791.35%28.85%
 480047163300141698.25%29.50%
 400038172650116795.43%29.18%
 90088062525597.78%28.33%
 500045052500200590.10%40.10%
 500012001200024.00%0.00%
 150100100066.67%0.00%
 300100100033.33%0.00%
 3000835083527.83%27.83%
 200017001700085.00%0.00%
 1000094004500490094.00%49.00%
 10000000.00%0.00%
 8000000.00%0.00%
 4000000.00%0.00%
Totals4065030311191561115574.57%27.44%

 

As you notice I have 8 of the 15 paid down to $0.  5 down under 30%, and two under 50%. 

 

My biggest challenge for this exercise is to use the $19,000 I have in the manner that will get me the greatest FICO score bump.

As I've stated (but likely buried in previous comments), when I pull my credit the top "factors hurting your score" factors are:

 

1. Too many credit cards with an outstanding balance

2.  Too high of a balance on revolving credit cards

 

I can work the extra $10,000 in August when I get it... but for now I need to stick to only planning for right around $19,000.

 

Thanks!


Current FICO Scores: EQ749; TU732; EX733
Message 16 of 30
BrutalBodyShots
Super Contributor

Re: Have money to pay CC's but need help determining which ones

IMO, there's not going to be a significant difference no matter where you pay down the dollars.  Debt is debt, and paying down $19k is going to be paying down $19k which is a great thing.  Sure you may see 4-5 points more of you do X or see 4-5 points less if you do Y, but in the end your scores are going to be much better and your profile in general much stronger for whoever lays eyes on it.  I wouldn't sweat the small stuff too much here, as the end result is going to be nearly the same no matter what you do.

Message 17 of 30
Thomas_Thumb
Senior Contributor

Re: Have money to pay CC's but need help determining which ones

Depending on how things are paid down, score difference could certainly vary 20 points or possibly more.

 

Let's look at two situations where you paydown the same total amount resulting in the same aggregate revolving utilization.

 

In the 1st case you leave one or more cards in max out condition (90% utilization or above) and report balances on more than half of your 15 cards (say 9). In the 2nd case you pay down all cards to under 49% each and less than 50% reporting a balance (say 7 cards). Your score in case 2 will likely be 20 to 30 points higher than case 1.

 

Note: Utilization rounds up so you really should have a card under 49% to avoid triggering the 50% utilization threshold and under 29% to avoid hitting the 30% threshold. So I'd suggest $4850 instead of $4900 on the account with the $10k CL. Otherwise what you have looks good.

 

As others have said utilization is a point in time factor. So, if you are planning to pay off another big chuck the following month, how you distribute this month's payments won't really matter a couple months down the road. Nonetheless, why not optimize impact of paydown? Now if you have a couple 0% APR promo cards and a couple 21.9% APR in the mix along with some 10.9% to 17.9% APR cards, then you might want to pay down/pay off the highest APR cards 1st.

 

 

Fico 9: .......EQ 850 TU 850 EX 850
Fico 8: .......EQ 850 TU 850 EX 850
Fico 4 .....:. EQ 809 TU 823 EX 830 EX Fico 98: 842
Fico 8 BC:. EQ 892 TU 900 EX 900
Fico 8 AU:. EQ 887 TU 897 EX 899
Fico 4 BC:. EQ 826 TU 858, EX Fico 98 BC: 870
Fico 4 AU:. EQ 831 TU 872, EX Fico 98 AU: 861
VS 3.0:...... EQ 835 TU 835 EX 835
CBIS: ........EQ LN Auto 940 EQ LN Home 870 TU Auto 902 TU Home 950
Message 18 of 30
medicgrrl
Valued Contributor

Re: Have money to pay CC's but need help determining which ones

Your spreadsheet looks good. But don't stress over it. Even if you don't "maximize" your scores in July, you will in August.


EQ 778 EXP 782 TU 729
Message 19 of 30
Barneygirl
Frequent Contributor

Re: Have money to pay CC's but need help determining which ones

Thank you everyone for taking the time out to help me through this!!!! I just made all the payments and now am in "hurry up and wait" mode! 😊 Luckily I have a few cards that I just squeaked the payment through in time to hit relatively quickly so I should start seeing the impacts soon!!!

Will let you all know the result from this round of payoffs and paydowns!

Current FICO Scores: EQ749; TU732; EX733
Message 20 of 30
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