1) Please do not believe that as long as you are below 89% utilization, then you are okay. I think I know where this myth may come from. Once you go above that 90% utilization threshold, potential creditors looking at your report think you are too close to maxing out your available credit. So, yes, it's good not to be 90% and over, but it doesn't stop there. I've heard a utilization of 50% is optimal. I've heard a utilization of 30% is optimal. I've heard a utilization of 10% is optimal. The FICO scoring does not have a magic utilization number that once you hit, you are golden. The point is, the lower you utilization is, the better. And is it not just the overall utilization that matters, but the utilization of each individual credit account as well. I have seen a 100 point increase in my FICO score by bringing my overall utilization down to 10% (from 30%), and by bringing the utilization of my largest individual accounts down from 82-92% to 0-10% (like you, I was in the same boat of having zero balances on accounts with low credit lines but very high balances on those with high credit lines and I had a score of 660 then). So overall, your utilization is 85%, which already is not good, but on those individual credit accounts that have balances, you utilization is 99%, 95%, 57%, and 79%, respectively, which is worse. Therefore, take AlishaR's advice. It is the closest you will come to lowering those credit accounts to around 50%. And for the Wells Fargo credit accounts that you cannot get below 50% with the $10K - I'd suggest getting some money from somewhere (cutting your spending maybe?) to try to get those credit accounts below 50% as well.
2) Utilization is not judged by how many accounts have balances versus the total number of accounts that you have in total. It is judged by how much credit you are using versus how much total you have been given to use. So this 50% rate of accounts with balances that ilovepizza refers to is misleading. It's the balances that count. You have zero balances on those credit accounts with the lowest credit limits and very high balances on those with the highest credit limits. You would be so much better off it were the other way around - you had zero balances on those with the highest credit limits and high balances on those credit accounts with the lowest credit limits, although, ideally, you want to have low balances on all. See math below:
Current situation:
Wells Fargo LOC - Balance $16,300 - Credit Line $16,500 - Utilization 99%
Wells Fargo - Balance $6,200 - Credit Line $6,500 - Utilization 95%
WAMU CC - Balance $1,700 - Credit Line $3,000 - Utilization 57%
CITI CC - Balance $4,200 - Credit Line $5,300 - Utilization 79%
Compass CC - Balance $0 - Credit Line $600 - Utilization 0%
Household CC - Balance $0 - Credit Line $300 - Utilization 0%
Legacy CC - Balance $0 - Credit Line $350 - Utilization 0%
FNCC CC - Balance $0 - Credit Line $850 - Utilization 0%
Overall utilization: 85%
Reverse situation (if those utilization rates were instead on the accounts with the lower limits and the accounts with the higher limits had zero balances):
Wells Fargo LOC - Balance $0 - Credit Line $16,500 - Utilization 0%
Wells Fargo - Balance $0 - Credit Line $6,500 - Utilization 0%
WAMU CC - Balance $0 - Credit Line $3,000 - Utilization 0%
CITI CC - Balance $0 - Credit Line $5,300 - Utilization 0%
Compass CC - Balance $570 - Credit Line $600 - Utilization 95%
Household CC - Balance $171 - Credit Line $300 - Utilization 57%
Legacy CC - Balance $276.50 - Credit Line $350 - Utilization 79%
FNCC CC - Balance $841.50 - Credit Line $850 - Utilization 99%
Overall utilization: 5.6%
Over course, optimally, you want a low overall utilization on all credit accounts in total and individually, but you can still see how the reverse situation outlined above is better than your current - proving that number of accounts with balances versus the total number of accounts that you have in total is not as important as how much credit you are using versus how much total credit you have been given to use.
3) Yes, it's wonderful to pay off you highest interest rate cards first for personal financial planning and debt management purposes. However, the objective here is low utilization, overall and each credit account individually, so it is better to spread your lump sum $10K out among those credit accounts with balances so that you can get below 50%, overall and individually. Then, after closing on your house, concentrate on paying off higher interest rate debt first.
4) How lenders evaluate how many credit accounts are too much is very judgment. However, I think if you have a certain number of credit accounts and it seems that you cannot handle them (either because you are late on payments or you are close to maxing out or actually have maxed out or the total monthly minimum payments on them jeopardizes your ability to comfortably make a mortgage payment, you know that debt to income ration), then the number of credit accounts may be viewed as too much. But if you can handle the number of credit accounts that you have, if shouldn't be a problem. 8 credit accounts doesn't seem excessive. I have 15 credit account (one a student loan, the others are credit cards and lines of credit) and I still have a FICO score of 776 (Equifax), because despite having so many lines, my utilization is 10%, and I have no missed payments so it shows that I can handle having all those credit accounts.
5) Totally agree with marty56.
6) Re: RobertEG. Great advice overall, but I think in terms of getting the lowest possible mortgage rate, FICO score is the most heavily weighed factor. Having lots of liquid assets make your application look better for approval, but the FICO scores is what's going to get that great low rate.
7) Lenders use FICO, not PFICO. Get your real FICO score. Won't count as an inquiry but you'll have to pay for it.
8) Recently saw my score drop from 776 to 773 because the utilization on the only credit card I am currently carrying a balance on went from 43% to 64%, even though overall utilization only went from 9% to 10%. Lesson: utilization on individual accounts count as well, even if they are below the 90% danger zone. Then I saw my score go from 773 to 776 because I used a card that I hadn't used in over a year to purchase something, even though I promptly paid it off before the statement was even generated. Lesson: Even if you want to maintain zero balances, you need to use those zero balance account periodically (which you can then promptly pay off) in order to boost your score even more.
8) What exactly are you waiting to hear back from your mortgage broker about?
