@Anonymous wrote:
@kiea wrote:
I'm having the same issue. My scores were close to 700 about 6 months ago and now they are a little under 600 and its basically because of my ulitization. I moved out of state for a better job opportunity and my credit card balances increased because I had to use them on hotels, travel, and the move itself. I plan on focusing on one card at a time while paying the minimum on the rest. Maybe you should try doing the sameI guess I'm a bit confused on how paying one off, but maintaining high balances on the others is smarter than getting all of them down to atleast 50% utilization this reporting period, then 30% next period. I know regardless I need to get this utilization down.
Agreed, that's a decent strategy for when cards are 50% or below, but when you have multiple maxed out cards, bringing them all down from 90%+ first is a better move, IMO.
@Anonymous wrote:
@kiea wrote:
I'm having the same issue. My scores were close to 700 about 6 months ago and now they are a little under 600 and its basically because of my ulitization. I moved out of state for a better job opportunity and my credit card balances increased because I had to use them on hotels, travel, and the move itself. I plan on focusing on one card at a time while paying the minimum on the rest. Maybe you should try doing the sameI guess I'm a bit confused on how paying one off, but maintaining high balances on the others is smarter than getting all of them down to atleast 50% utilization this reporting period, then 30% next period. I know regardless I need to get this utilization down.
There are a few ways to pay down debt. What they're talking about is either snowballing or avalanching. These are used when someone doesn't have the ability to pay down large chunks.
Regardless of method, they should all be immediately brought down low enough that interest or an annual fee won't keep you maxed or accidentally take you over limit. If you have the cash and can pay chunks, spreading it across all the cards can give you score boosts as you cross thresholds. Personally, I feel if you're focused on paying down debt, you shouldn't be worried about your scores unless you're looking at a consolidation loan or if you need something like a new car asap.
Avalanching is focusing on paying off the card with the highest APR first so you pay less interest. All other cards only receive a minimum payment. Once done, move to the next card while adding the previous card's payment to the new one.
Snowballing is focusing on paying off the card with the lowest balance first. This is more for a psychological boost as it helps motivate people as they hit smaller and faster milestones. While you may pay more in interest, people underestimate how well this can motivate someone, especially if they felt like what they're trying to do is impossible. Same premise though. Pay off a card. Roll that payment into the next card
I was just reading this article that states the best strategy is to pay all cards to 29%. I'm not sure if that is best or not. I just thought it would be to pay the entire balance at once so I won't have to make monthly payments.
@Anonymous wrote:
@FishingGuy wrote:Hi Rose,
You're on the right track, however I noticed you said that you pay your bills two days before the end of the cycle... here is a suggestion.
I have had instances where an issuers site had problems, so to make absolutely sure I don't have a late payment I often pay something earlier in the month ( at least the minimum, or something above that )... so in case the unexpected happens..... at least the minimum is covered.
THEN, I make a second payment closer to the end of the cycle.... to reduce the reported amount before, should something "anything" come up, ( including a "glith" in their system ) at least there won't be a late payment...... just sharing a thought of what I often do.
Thank you! I've actually read making two payments a month boosts your score.
Hate to burst your bubble, but I don't want you to be misinformed. The number of payments you make per month doesn't matter. It could be one lump sum for your full balance, or it could be spread across several payments. It doesn't matter or boost your score whatsoever. What helps your score is having low utilization, and using the AZEO method (all zero except one), meaning out of all of your credit cards, only allow one to report a balance, and all the rest should be at zero balance before statement date. This is because FICO penalizes you for having no accounts with balances as well as for having too many accounts with balances.
