So this is a wierd strategy I'm trying to think through.

[Anonymous]

I have about $12k in cc debt. I am also an authorized user on a few of the spouses cards. My utilization is about 5% right now, but I feel if I pay off a couple of my higher balances it will trigger some nice credit line increases, or at least open some new doors. Her credit rating is not as important as mine, if only for business purposes, as I will be applying for some business related financing in my own name. I am the one who pays all of our bills anyway. So.....I am considering doing a balance transfer from her account which I am an AU on, then imediately having her remove me as an AU on that card. She will not be hurt, as she would still be at about 12% util, over all. Her score is about 25 pts higher than mine. I'm sure the cards I will be paying off will be watching, but there won't be an increase in my utilization. At which time I have higher credit lines, have accomplised my goal, etc., I will either pay her balance off or BT it to a newer, higher limit card of mine. Oh, the credit game....has so many possibilities. Bottom line...who cares, as long as the bills get paid. Feedback is welcome...and tell me if I am nuts too!

[takeshi74]

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@Anonymous wrote:

So.....I am considering doing a balance transfer from her account which I am an AU on, then imediately having her remove me as an AU on that card.

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I think it's just your choice of words but a BT from her account won't help your revolving utilization.  A BT to her account might help but you need to recalculate utilization without the limits of her accounts where you're removing yourself as an AU.

If you're already at 5% reported you probably won't see much of an improvement for going lower.  You may see some points but I wouldn't expect a drastic change.

You should review your credit profile to see what you can address but a reporting BK may limit you no matter what you do until it falls off.  IMO your signature looks pretty good from what little information is available regarding your profile.  Just make sure you have realistic expectations and realize that rebuilding is a long, slow process.

[Thomas_Thumb]

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@Anonymous wrote:

I have about $12k in cc debt. I am also an authorized user on a few of the spouses cards. My utilization is about 5% right now, but I feel if I pay off a couple of my higher balances it will trigger some nice credit line increases, or at least open some new doors. Her credit rating is not as important as mine, if only for business purposes, as I will be applying for some business related financing in my own name. I am the one who pays all of our bills anyway. So.....I am considering doing a balance transfer from her account which I am an AU on, then imediately having her remove me as an AU on that card. She will not be hurt, as she would still be at about 12% util, over all. Her score is about 25 pts higher than mine. I'm sure the cards I will be paying off will be watching, but there won't be an increase in my utilization. At which time I have higher credit lines, have accomplised my goal, etc., I will either pay her balance off or BT it to a newer, higher limit card of mine. Oh, the credit game....has so many possibilities. Bottom line...who cares, as long as the bills get paid. Feedback is welcome...and tell me if I am nuts too!

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My experience is you will see NO increase in scores associated with reducing aggregate CC utilization from 5% to something lower. I suspect optimum utilization is around 4.5% but there is no value in micromanaging UT to that degree. I maintain aggregate UT at under 6% but allow it to float between 1% and 6% with no impact on score.

Note: the # cards you allow to report a balance can impact score regardless of aggregate utilization. For some profiles reporting a balance on more than one card can cause a minor score drop (say 5 points). Other profiles can allow balances to report on 50% of their cards without a score change as long as AG UT% is kept low. 

Take a look at your reason codes (statements) for: "Too many open accounts reporting a balance" to see if # cards reporting a balance is affecting your score. Generally, the down side of reporting balances on most cards [independent of UT%] is 10 to 15 points max.

Suggest keeping things as is but it is your call. Regardless, it is always good financially to pay down high interest debt.

[Anonymous]

ThomThumb closes with a crucial observation:

Regardless, it is always good financially to pay down high interest debt.

You are 12k in CC debt and (we are assuming) much of that 12k is being carried from month to month, which almost certainly means you are paying a high interest rate on it.  That in turn suggests that you may lack a fund to deal with emergencies and may be saving little in other regards (for why would you be putting money into savings or retirement when you could pay off high interest debt?). 

Your post is about finding ways to tweak your score so that you can obtain more credit line increases. Since you are at a 5% utilization and have 12k in CC debt, it means your current total credit limit is 240k.  I think it's a fair thing to say that you don't need a bigger credit limit.  Quite to the contrary it is likely that a lower CL might have prodded you to rein in your spending and therefore save more.

Your FICO is fine with respect to CC utilization.  What may be more profitable is to reflect on whether you are spending much less than you take home.  That's the goal all of us, me included, need to work toward, since it leads to an ability to save.  The 12k in CC debt and the desire to extend your ability to go even further into debt are signs that you may need to shift to a different mindset. 

Those are just a few thoughts.  Here's wishing you all the best.

PS.  I don't rule out the possibility that you make an annual salary of 500k or more, and thus you are actually paying your cards in full each month.  That strikes me as unlikely, but of course it is possible.

[Thomas_Thumb]

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@Anonymous wrote:

ThomThumb closes with a crucial observation:

Regardless, it is always good financially to pay down high interest debt.

You are 12k in CC debt and (we are assuming) much of that 12k is being carried from month to month, which almost certainly means you are paying a high interest rate on it.  That in turn suggests that you may lack a fund to deal with emergencies and may be saving little in other regards (for why would you be putting money into savings or retirement when you could pay off high interest debt?). 

Your post is about finding ways to tweak your score so that you can obtain more credit line increases. Since you are at a 5% utilization and have 12k in CC debt, it means your current total credit limit is 240k.  I think it's a fair thing to say that you don't need a bigger credit limit.  Quite to the contrary it is likely that a lower CL might have prodded you to rein in your spending and therefore save more.

Your FICO is fine with respect to CC utilization.  What may be more profitable is to reflect on whether you are spending much less than you take home.  That's the goal all of us, me included, need to work toward, since it leads to an ability to save.  The 12k in CC debt and the desire to extend your ability to go even further into debt are signs that you may need to shift to a different mindset. 

Those are just a few thoughts.  Here's wishing you all the best.

PS.  I don't rule out the possibility that you make an annual salary of 500k or more, and thus you are actually paying your cards in full each month.  That strikes me as unlikely, but of course it is possible.

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Total CL from adding cards in signature appears to be about $113.5k. That would equate to about 10.6% aggregate utilization given a $12k CC balance.

[Anonymous]

Thanks TT.  Our OP may be mistaken then in his utilization calculations.  He's under the impression that he's got a 5% utilization.

The central question regardless, to me at any rate, is the one you hit on earlier.  If the guy is mungo wealthy and paying his cards in full (and presumably saving plenty for retirement, etc.) then he's good to go.  The 12k balance is just his normal monthly spending.  (I want to be this guy!)

But a fair guess (which I think you were suggesting as a possibility) is that most of the 12k balance is being carried month to month with high interest being paid.  That in turn (if true) suggests to me that he needs to shift his priorities from FICO tweaking to spending less, paying off debt, and saving more.

[Anonymous]

Thanks for all the replies so far. As for my utilization calculation, I quit adding cards to my signature quite some time ago. That is not accurate. I have $238k in credit lines.

[Anonymous]

You should still prioritize paying down your balance. Carrying $12k month to month is a financial disaster.

[Anonymous]

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@Anonymous wrote:

You should still prioritize paying down your balance. Carrying $12k month to month is a financial disaster.

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I agree with you. Normally carrying $12k month to month is a financial disaster, especially for those paying high interest rates of 18% or more. This is not our situation. I could pay off all of it tomorrow, but would lose having money seasoning in my account. (those with business loan experience will understand the importance of it.) All but $3k of that balance is already on a 12mo 0% rate, because of BTs. The remaining $3k is at 2.9% interest. My moves are only about moving money around for the greatest impacts on credit and utilization. I use credit as a tool, not out of desperation. I hope this makes more sense.

[takeshi74]

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@Anonymous wrote:

Her credit rating is not as important as mine, if only for business purposes, as I will be applying for some business related financing in my own name.

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With respect to this bit from your OP,  you just want to be careful that you're not too close to your internal limits with creditors but if that is an issue you should be able to close out tradelines if needed.

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@Anonymous wrote:

At which time I have higher credit lines, have accomplised my goal, etc.,

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What is your goal?  Why are you seeking higher CL's if you're just under $240K total with 5% utilization?