Single Card Util vs. Total Util

[trinigal30]

I know this question has been asked before but my situation is a bit different in that my balance are very high and therefore my util is very high on every single card. I'm trying to get rid of my cc debt but in the short term, I would like to consolidate & refinance my private loans.  I have no desire or need to apply for any other type of credit.  Part of my debt is from a loan to a former friend that I'm now starting to recover via garnishment.  With this recovery on the loan, I want to put myself in the most favorable position.  My fico is around 710.  Below is an estimate of my cc situation.  Would it be better to reduce each single card to 30% util or use the snowball method and start with the lowest balance.

 

Thanks in advance! 

[Anonymous]

For FICO purposes, every card below 28.9% and remember if interest posts it'll out you over that amount if you pay down to just that.

30% is too high for FICO scoring.  So is 29.1%.

[trinigal30]

Thank you for your response.  I've adjusted my formula to get me to the 28.9% util. Will be working to get this down so I can work on refinancing my private student loans.

[Anonymous]

Just remember interest posting will happen at statement cut and raise your balance so pay down enough so with new interest you're at 28.9% or lower!

Will make a huge difference on FICO8.

[Thomas_Thumb]

Once you get all three below 28.9%, pay your card with the lowest balance to zero.

All else being equal, 3 of 3 cards reporting balances could be costing you 10 to 15 points vs 2 of 3 reporting balances.

[Anonymous]

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wrote:

Once you get all three below 28.9%, pay your card with the lowest balance to zero.

All else being equal, 3 of 3 cards reporting balances could be costing you 10 to 15 points vs 2 of 3 reporting balances.

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What about out of 24 cards, 3 reporting balances vs. 3 cards with one reporting balance? 

[Anonymous]

The rule is "less than 1/3 cards with balance but at least 1 card with balance" so if you only have 3 card you're in a place you can't do this.  Either you report less than 1/3 cards meaning zero cards (ding for zero cards with balance) or you report 1 card with balance (ding for 1/3 of cards with balance or more).

The equation is Y=(roundup(X/3)-1) && Y => 1 for cards with balance. So if you have 24 cards, you can report Y=(roundup(X/3)-1), Y=(roundup(24/3)-1), Y = anywhere from 1 to 7 cards with balance and not get dinged by FICO.

With 5 cards total you'd do Y=(roundup(5/3)-1), Y = 1 card with balance.

With 3 cards total you'd do Y=(roundup(3/3)-1), Y = 0 cards with balance but AZEO requires a minimum of 1 card so you get dinged either way.

[Anonymous]

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All else being equal, 3 of 3 cards reporting balances could be costing you 10 to 15 points vs 2 of 3 reporting balances.

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All else likely wouldn't be equal though in the case of the OP, because with 3 cards with high balances if he were to move to 2 his aggregate utilization would change as well.  Even if we were talking tiny balances on all 3 cards, there's no way to know for sure if he would experience a score gain.  I've posted many times about having 25%-100% of my cards reporting balances without seeing a score change and only seeing one when I allowed 0% of cards to report balances.  It's all very profile-specific and may or may not impact the OP.

[trinigal30]

Since my goal is to pay off my CCs, this approach works for both my short term and long term goal.  Thanks alot! Making my 1st payment today!

[HeavenOhio]

Getting one card paid off well ahead of the others can have an eventual scoring benefit that hasn't been mentioned. When a balance is carried over time and is paid off, trailing interest will need to be paid and the grace period will need to be reset. This generally takes a cycle beyond the "final" payment.

When the other cards are set to be paid off, this card can be ready and waiting to report a small balance that can be paid in full without incurring interest. That will avoid the ding for all cards reporting zero.