Utilization question

[Anonymous]

Ok so my biggest challenge left is the high utilization of my revolving credit.  I have some small bills around 300.00 up to some debt that is 8400.00.  Would it be best to try to get each card down to a set increment of utilization like 75%, then 50%, then 30%, etc.  (I know ideally it is best at 10-30% utilization) or should I pay off some of my smaller ones off first completely??

Thanks,

Juli

Utilization is 92%

[fused]

Hi and Welcome to the myFICO fora! Please post your credit card credit limits, their current balances and how much cash you have on hand. Paying off high balances is the fastest way to improve your FICO scores.

[marty56]

Best util is 9% or lessif you can afford to do so.  I would also pay down a CC that was close to being maxed out down first.  This is contrary to most debt reduction plans but my reason is that some CCCs are lowering CL of user's cards for no good reason and if they lower your CL, that will make things worse.    

[Anonymous]

Here is my CC's balances and limits:

Card                         Balance                   Limit

QVC                         316.00                      900.00

Household Bank       704.00                     905.00

Target Visa              4714.00                    5000.00

Home Depot             2000.00                   2100.00

JC Penney                2138.00                   2700.00

Bank of America       4200.00                   4500.00

Lane Bryant              510.00                      770.00

Washington Mutual   2830.00                   3000.00

hhgregg                    1347.00                   1500.00  (this one is no interest for 2 years)

Beneficial                  8400.00                   9000.00

Capital one                610                          700.00

As for cash on hand it currently isn't much, but will be getting a chunk of about 500.00 to start paying stuff down and then whatever available we have each month we are putting towards the debt...just wanting to know how to tackle it.

Thanks,

Juli

[llecs]

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tiggs1069 wrote:

Here is my CC's balances and limits:

Card                         Balance                   Limit

QVC                         316.00                      900.00

Household Bank       704.00                     905.00

Target Visa              4714.00                    5000.00

Home Depot             2000.00                   2100.00

JC Penney                2138.00                   2700.00

Bank of America       4200.00                   4500.00

Lane Bryant              510.00                      770.00

Washington Mutual   2830.00                   3000.00

hhgregg                    1347.00                   1500.00  (this one is no interest for 2 years)

Beneficial                  8400.00                   9000.00

Capital one                610                          700.00

As for cash on hand it currently isn't much, but will be getting a chunk of about 500.00 to start paying stuff down and then whatever available we have each month we are putting towards the debt...just wanting to know how to tackle it.

Thanks,

Juli

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If you have no other accounts factoring into utilization like CC COs, then you are at 89% utilization. If you were to bring it down to 9% or pay off just under $25k, you'll get about an 80 point jump.

FICO doesn't care how you pay it down, but they like to see under 10% with about half your cards with balances of at least $1.

See if you can't bump up the $500.

Money-wise, some say to pay the highest interest rate first and chip down to $0 then start the next. I differ in opinion and IMO, pay every CC the minimum, but pay extra to your lowest balance. Once you pay that off, then shelve it and throw that minimum off the paid off CC to the next and so on. Interest could be bad, but the less you have to pay in minumum payments the more you can throw to the others. Plus, your FICO score will be better at it is showing a $0 balance. Just be sure not to use your CCs until paid.

[llecs]

To add..........your utilization may differ as Beneficial may not be calculating as revolving but this may be a loan. If that is the case, then pay Beneficial as scheduled and pay everything else down as rapidly as possible. Without Beneficial, your utilization is still around 88%.

[Anonymous]

Any way you look at it, that's a heavy load, and probably exerting a nasty 70 to 85-point parasitic drag on your FICO score.

I would go for the highest-interest debt first. There's really no secret or optimal pattern to getting CC balances down. You just have to pay it down as best you can.