really confused please help with cc debt question

[Anonymous]

ultimately am i better off paying cards down to zero or is it better to have some balance on cards.  i have large amount of cc debt but can take a big chunk out of it, just wondering if i should try and leave <10% balances on all cards or zero some out..  do i benefit from paying down more cards or paying off fewer (or does it matter).  can i leave like a $50 balance on a 1K card, does that help at all?

no delinquent payments, cc util is literally my only negative but my score is <700 and im trying to break 730.  i just paid off two car loans in the last four months (completed payment cycles), ive heard that may not help, but i do have an installment loan so maybe that keeps the mix allright?

so confused with all this, thanks for the help

[chnceit]

Great job on paying off your car loans. Car loans do not play a factor in FICO scoring because they are installment loans. But does report so any positive tradelines is great.

Below 10% utilization across all cards is key, the sweet spot is below 8%. But paying off all cards except one CC to report the 10% is good, less interest to pay to lenders. You will for sure see a bump in your FICO one you pay down your CCs

[Anonymous]

It is better to have all but one card report a 0 balance.  The one with the balance should report at 9% or under.  YMMV.

Installment loans, such as a car loan, have a utilitzation factor separate than revolving in FICO scoring.  They play a very little role in your score.  What could hurt if you paid off the car would be mix of credit, unless you have another installment TL.

Even if it is not possible to get your CC optimum at this point, FICO has no memory, so every time you make a payment, your score should go up, depending on other factors of your CR.

[tcbofade]

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@chnceit wrote:

Great job on paying off your car loans. Car loans do not play a factor in FICO scoring because they are installment loans. But does report so any positive tradelines is great.

Below 10% utilization across all cards is key, the sweet spot is below 8%. But paying off all cards except one CC to report the 10% is good, less interest to pay to lenders. You will for sure see a bump in your FICO one you pay down your CCs

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Ummm.  Sure they do.  Skip a few car payments and see what happens to your score. 

OP, if you have the dollars availabe and need to improve your score, pay off more than half of your cards...if you have seven CC accounts, pay four of them to zero. 

As for the "best possible" score, it's kind of a ymmv thing, but most suggest paying off all of your CC accounts accept one, and letting it report a small balance.  (0-9% if it's credit line.)

Good luck!

[chnceit]

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@tcbofade wrote:

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@chnceit wrote:

Great job on paying off your car loans. Car loans do not play a factor in FICO scoring because they are installment loans. But does report so any positive tradelines is great.

Below 10% utilization across all cards is key, the sweet spot is below 8%. But paying off all cards except one CC to report the 10% is good, less interest to pay to lenders. You will for sure see a bump in your FICO one you pay down your CCs

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Ummm.  Sure they do.  Skip a few car payments and see what happens to your score. 

OP, if you have the dollars availabe and need to improve your score, pay off more than half of your cards...if you have seven CC accounts, pay four of them to zero. 

As for the "best possible" score, it's kind of a ymmv thing, but most suggest paying off all of your CC accounts accept one, and letting it report a small balance.  (0-9% if it's credit line.)

Good luck!

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Sorry to clarify I was talking about utlization. Of course if you missed a payment it will hurt because of history. 

[Anonymous]

Installment loans do have a separate utilization scoring from revolving.  It doesn't bear near as much weight as revolving however.

[Anonymous]

thanks, i guess my main question was if there is any benefit to leaving a very small balance on cards or just paying them to zero...the impression i get is that as long as you have some cc util (hopefully low) then it doesnt matter if its one card or several?

[StartingOver10]

Yes, it makes a difference if you have every card report zero except for one with the small balance. You can experiment with your own cards by testing that theory, or you can read the threads where people have had mulitple small balances report. Your score will be higher if only one revolver reports a small balance less than 10%

[Anonymous]

You never want all of them to report a 0 balance.  FICO doesn't like that.

For optimum scoring, as stated, let all but one report 0 and the other 9% or less.  YMMV.  I've seen one who let a small balance report on more than one and the score went up.