Utilization and Fico Score

[Amleigh]

I have a credit card that currently has a balance of $230 and a limit of $300. How much will my score be affected if I pay this down to a zero balance? I have two other credit cards that have both have a $900 limit; one has a $0 balance and the other one has a $399 balance. The last two are store cards.

Message Edited by Amleigh on 11-24-2009 09:12 AM

[MarineVietVet]

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@Amleigh wrote:
I have a credit card that currently has a balance of $230 and a limit of $300. How much will my score be affected if I pay this down to a zero balance? I have two other credit cards that have both have a $900 limit; one has a $0 balance and the other one has a $399 balance. The last two are store cards.

Message Edited by Amleigh on 11-24-2009 09:12 AM

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It's hard to say exactly how much your score will be helped but anytime you can pay down revolving credit balances it's a good thing. Right now your overall utilization is 30% (629/2100). By paying the $230 the util will then be 19%.

What is the interest rate on each card? You might consider paying down the one with higher interest to save a little money because your overall util will be the same. If you are looking strictly at FICO then:

Optimal credit utilization for FICO scoring purposes seems to be:

Total revolving utilization > 0 and < 9%, the lower the better, and
Reporting a balance on less than half of your revolving TL's, and
Reporting a balance on half or less of all TL's.

(myfico)
7/09 TU-742 EQ- 779
8/09 TU-765 EQ- 783
9/09 EX pulled by lender 802

CC interest free as of 8/09
Time can heal all wounds and a low FICO.
"Hello my name is Sandy and I'm a recovering crediholic".

[DI]

It depends on several things.  Long as your utilzation is below 9% you're ok.  But you never want to appear maxed out on one card.