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Help me decide

Your FICO® Scores can impact your loan interest rates, terms, approvals and more.
Regular Contributor

Help me decide

In February will be 6 months on my car loan and I will refinance.

i have 3 credit cards (all currently in 0% interest)

In February their balances will be,

-$1414 of 2,500 limit,

-$2250 of 3,900 limit

-$1,154 of 2,800 limit ( this one is synchrony amazon so I believe my limit will have gone up by then)

 

To get the best refi rate, do I pay all cards down to 30% or do I pay off 2 and leave the highest balance one at 54%? I want to put as much possible down on my car before refinancing and as little down on the cards since they are in 0% interest 

 

Thanks in advance.

 

| AMEX | DISCOVER | SYNCHRONY | CITI | US BANK | BBVA COMPASS |
Message 1 of 12
11 REPLIES 11
Community Leader
Super Contributor

Re: Help me decide

The relevant breakpoints are 28.99% and 48.99%.   Paying to 30% is a bad plan without going the extra mile and paying to 28.9%.

 

Two scenarios that would both be good are:

    (a)  One card at < 48.9% and two at $0 (with total util < 28.9%)

    (b)  All cards at 28.9%

 

I can't be certain which would be better.  You should definitely do one of those.

Message 2 of 12
Super Contributor

Re: Help me decide


@BabyFaceNelson wrote:

In February will be 6 months on my car loan and I will refinance.

i have 3 credit cards (all currently in 0% interest)

In February their balances will be,

-$1414 of 2,500 limit,

-$2250 of 3,900 limit

-$1,154 of 2,800 limit ( this one is synchrony amazon so I believe my limit will have gone up by then)

 

To get the best refi rate, do I pay all cards down to 30% or do I pay off 2 and leave the highest balance one at 54%? I want to put as much possible down on my car before refinancing and as little down on the cards since they are in 0% interest 

 

Thanks in advance.

 


To get the best rate pay 2 cards down to zero and the other to 28%.


FICO8 EQ 749 TU 779 EX 749 Total revolving limits 708k (587k reporting)
Message 3 of 12
Community Leader
Super Contributor

Re: Help me decide

To what SouthJ just said I would add "... and get your total utilization under 8.99%."

 

He's right that this is what you'd do to optimize your score.

 

On the other hand, you raised an additional need which is to avoid paying off that much CC debt.  That's why I gave you the two approaches I did.  Both are fair compromises that will help your score a lot while avoiding having to pay off that much on your 0% cards.

Message 4 of 12
Regular Contributor

Re: Help me decide

The time has come and I was able to pay off the last of my cards. Now how long is a sufficient time to wait to refi so the balance won’t be on my credit report when I apply.

| AMEX | DISCOVER | SYNCHRONY | CITI | US BANK | BBVA COMPASS |
Message 5 of 12
Established Contributor

Re: Help me decide


@BabyFaceNelson wrote:

The time has come and I was able to pay off the last of my cards. Now how long is a sufficient time to wait to refi so the balance won’t be on my credit report when I apply.


If you paid them all to zero, you need to let one report $10 with all others at 0 and wait.  I would keep checking Credit Karma until my scores go up and correct utilization is posted. One card with very low utilization usually provides the best score. All at zero hurts a little.

FNBO 2% Cashback Visa (20k) / Bank of the West Cashback MC (20k)
US-Bank Cash+ (15k) / FNBO Travel Elite (15k) / Citi Double Cash (18k)
Ficos : 840 / AAoA : 9 yrs / AoOA : 23 Yrs / AoYA : 3
Message 6 of 12
Regular Contributor

Re: Help me decide

For what ever reason credit karma doesn’t update my balances. CITI shows my fico score at 750 and credit karma has me at 675 with balances from 6 or so months ago.

| AMEX | DISCOVER | SYNCHRONY | CITI | US BANK | BBVA COMPASS |
Message 7 of 12
Super Contributor

Re: Help me decide


@BabyFaceNelson wrote:

For what ever reason credit karma doesn’t update my balances. CITI shows my fico score at 750 and credit karma has me at 675 with balances from 6 or so months ago.


None of those are actual Fico scores.  (Sorry, Citi is a VERSIOn of Fico, but not the one you want...)

 

Your American Express account will give you your Experian Fico 8 score with monthly updates.

 

Your Discover account will give you your TU Fico 8 score with monthly updates.

 

Go find those, and tell us what your Fico 8 scores are.  Smiley Happy

Last inquiry 31 January 19. Going for Gold!

Zero percent financing is where the devil lives...
Message 8 of 12
Super Contributor

Re: Help me decide


@BabyFaceNelson wrote:

In February will be 6 months on my car loan and I will refinance.

i have 3 credit cards (all currently in 0% interest)

In February their balances will be,

-$1414 of 2,500 limit,

-$2250 of 3,900 limit

-$1,154 of 2,800 limit ( this one is synchrony amazon so I believe my limit will have gone up by then)

 

To get the best refi rate, do I pay all cards down to 30% or do I pay off 2 and leave the highest balance one at 54%? I want to put as much possible down on my car before refinancing and as little down on the cards since they are in 0% interest 

 

Thanks in advance.

 


It would be best to have two at zero, and one at 28% or less.

 

If you can't do that it would be best to have the aggregate at 9% or less, with no individual account greater than 28%.


FICO8 EQ 749 TU 779 EX 749 Total revolving limits 708k (587k reporting)
Message 9 of 12
Super Contributor

Re: Help me decide


@BabyFaceNelson wrote:

The time has come and I was able to pay off the last of my cards. Now how long is a sufficient time to wait to refi so the balance won’t be on my credit report when I apply.


Make sure one card reports a small balance before you pay it off.

 

There's no way to answer your question because all cards report at different dates. So if you can't find out when everything will be reported, you should wait at least a month to make sure they've all reported.


FICO8 EQ 749 TU 779 EX 749 Total revolving limits 708k (587k reporting)
Message 10 of 12