@jg1983 wrote:
What is the best strategy as far as the order that I pay them off goes? Should I pay them off one at a time, spread the money evenly across all of them, pay off the two that my wife is an AU on first or does it not matter? Also I have read once you get below 30% utilization then 10% your score should go up. Is this true?
Pay off high interest rate cards first leaving the lowest for last. There is a score bump in Fico for having less than 28.9% of a cards CL reporting and I have not heard of what you ask above. The only time I would waiver from the payoff strategy is if some of the cards are reporting greater than 89% of their CL, I would pay these down below this percentage then allocate what is left to the highest-lowest scheme. Cards above 89% have a bigger Fico whammy as they are considered "maxed out" at that level of debt to total CL.
@jg1983 wrote:I am in the process of trying to get my mortgage score to over 640 and have some questions as far as getting my utilization percentage down goes. As far as negatives go I have a 30 day late over a year ago that I have given up on getting removed via goodwill requests, my high utilization and a couple small medical collections. I just did a pay for delete on a cell phone collection and saw my Experian mortgage score go from 580 to 630. All 3 of my FICO scores went up about 10 points also. I don't have access to my Equifax and Transunion mortgage scores however.
I'm thinking if I get my credit card utilization down I should see a boost in my scores and maybe that late payment wont hold me below 640. I am at about a $3800 balance with a $4000 total limit across 7 cards (recovering financially from being unemployed for a while). My plan is to pay them all down to zero as soon as possible but it will probably be over the course of 2-3 months. My wife is an authorized user on two of them. One of them being the card with a 30 day late payment and other than that she only has a personal loan and a car loan and we would like to get her scores above 640 also. I will have about $1600 in a week or two to throw at the credit card balances.
What is the best strategy as far as the order that I pay them off goes? Should I pay them off one at a time, spread the money evenly across all of them, pay off the two that my wife is an AU on first or does it not matter? Also I have read once you get below 30% utilization then 10% your score should go up. Is this true?
As @gdale6 mentions above, highest interest rate should take priority for payoff, once all cards are below 89% utilization.
The 10% utilization you mention has to do with a single card (you want to use less than 10% of a cards limit).
Based on what you've stated for your wife's credit, you'll also want to leave a small balance on a card she is an authorized user on... typically more than $5 and less than 10%
There is a penalty for all cards $zero reporting, so you'll want one (1) card major card to report a balance to avoid this penalty. The authorized user account for your wife only gives a boost while a balance is reporting, so if she is on a Visa or Mastercard I would choose one of those accounts to be the one that reports.
You can search the forums here for "AZEO" for more information (it stands for All Zero Except One).
Mortgage scores look at utilization in multiple ways; it looks at individual utilization, aggregate utilization and percentage of cards in use. Having more than 1/3 cards reporting a balance has a penalty.
Just to be clear, a reporting balance doesn't require you to pay interest. You pay off all but one card before the statement cut date, pay down the one card with a balance before statement cut date AND pay off that card after statement cut and before the due date... charge something else on it (long enough before statement cut date that it posts and your payment to keep it below 10% can post), rinse and repeat.
If you have a streaming service like Netflix or one of the dozens of other services, putting it on autopay to that card could be the easiest way to do this.
You'll need to use your other cards at least every six months to prevent the creditors from closing them.
I think with AZEO you should be able to get your middle mortgage score above 640 (assuming the other CRA's don't have any negatives not listed on Experian).
Good luck and happy house shopping!
@chiefone4u wrote:
@jg1983 wrote:I am in the process of trying to get my mortgage score to over 640 and have some questions as far as getting my utilization percentage down goes. As far as negatives go I have a 30 day late over a year ago that I have given up on getting removed via goodwill requests, my high utilization and a couple small medical collections. I just did a pay for delete on a cell phone collection and saw my Experian mortgage score go from 580 to 630. All 3 of my FICO scores went up about 10 points also. I don't have access to my Equifax and Transunion mortgage scores however.
I'm thinking if I get my credit card utilization down I should see a boost in my scores and maybe that late payment wont hold me below 640. I am at about a $3800 balance with a $4000 total limit across 7 cards (recovering financially from being unemployed for a while). My plan is to pay them all down to zero as soon as possible but it will probably be over the course of 2-3 months. My wife is an authorized user on two of them. One of them being the card with a 30 day late payment and other than that she only has a personal loan and a car loan and we would like to get her scores above 640 also. I will have about $1600 in a week or two to throw at the credit card balances.
What is the best strategy as far as the order that I pay them off goes? Should I pay them off one at a time, spread the money evenly across all of them, pay off the two that my wife is an AU on first or does it not matter? Also I have read once you get below 30% utilization then 10% your score should go up. Is this true?
As @gdale6 mentions above, highest interest rate should take priority for payoff, once all cards are below 89% utilization.
The 10% utilization you mention has to do with a single card (you want to use less than 10% of a cards limit).
Based on what you've stated for your wife's credit, you'll also want to leave a small balance on a card she is an authorized user on... typically more than $5 and less than
10%.<8.9%There is a penalty for all cards $zero reporting, so you'll want one (1) card major card to report a balance to avoid this penalty. The authorized user account for your wife only gives a boost while a balance is reporting, so if she is on a Visa or Mastercard I would choose one of those accounts to be the one that reports.
You can search the forums here for "AZEO" for more information (it stands for All Zero Except One).
Mortgage scores look at utilization in multiple ways; it looks at individual utilization, aggregate utilization and percentage of cards in use. Having more than 1/3 cards reporting a balance has a penalty.
Just to be clear, a reporting balance doesn't require you to pay interest. You pay off all but one card before the statement cut date, pay down the one card with a balance before statement cut date AND pay off that card after statement cut and before the due date... charge something else on it (long enough before statement cut date that it posts and your payment to keep it below 10% can post), rinse and repeat.
If you have a streaming service like Netflix or one of the dozens of other services, putting it on autopay to that card could be the easiest way to do this.
You'll need to use your other cards at least every six months to prevent the creditors from closing them.
I think with AZEO you should be able to get your middle mortgage score above 640 (assuming the other CRA's don't have any negatives not listed on Experian).
Good luck and happy house shopping!
@chiefone4uThe 10% usage of a credit line is inaccurate. You can use all of the cards limit. Your correct on paying it down before statement cut date. Although. The more you use the card. Better chance for CLI when requested.
@jg1983The 30% usage or reporting is a internet thing. Not true. That percentage doent apply anywhere. For revolving credit %'s thresholds are 88.9%, 68.9%, 48.9%, 28.9%, 8.9% are the moments that matter. As your reported util% goes up, scores go down. When you pay things off. Vice versa. As you posted above your near maxed out across the board being over 89.9%. Good luck on paying it all down and free from paying interest. Good Luck!
