questions:: options on Util % for quickest FICO score increase???

[Anonymous]

Hello all: I am new to this forum and would like to quickly increase my scores so I can try to refinance and perhaps cash out refi or get Home equity or HELOC in the next 2-3 months.

Mortgage balance of $79K and appraised about $131K.

I know from reading here that ideally you want < 9% on each CC Util and < 30% total Util, my question is if a have set amount of funds to pay within the next 2-3 months, how can I spread the payments to have the maximum increase in my score.

Here are the CC info:

CC Bal Limit Util %

#1 21368 22000 97.12727273

#2 17391 18400 94.51630435

#3 4456 5000 89.12

#4 16904 25000 67.616

#5 1963 3000 65.43333333

#6 1263 1500 84.2 Total 63345 74900 84.57276368

The TU and EQ fico explanations also mentions high installment balance(car loan) as a negative factor:

car 7402 16938 43.70055497

Is 43% UTIL considered HIGH with respect to an INSTALLMENT loan?

Let say I have $5000 to pay now, how should I apply the payments to have the best increase in score as far as UTIL is concerned?

Should I payoff accounts #5 and #6 to get ZERO UTIL %?

Would these have more effect or should I pay the highest UTIL account (#1) first?

Please no judgments on my debts. I made some unwise decisions and have been working to rebuild credit.

My oldest account is 19 yrs+ and only accounts above are active/open.

1 Baddie collect = PIF (did not know about PFD at the time) - date 11/1/2007

Thanks for all your responses in advance.

current scores: TU - 683, EQ-661

[Anonymous]

not sure on this one but if you brought those balances down overall ur scored would be crazy high!!!

[madmann26]

First thing. Take the CC's out of your wallet. If you can't PIF before the statement date, then don't use them. Of course, extreme situations exist.

Ideally you want no more then 9% utilization across all of your cards, not each one.

As for the refinance, it's a good idea but if it were me I'd just pay the balances down over time. This will net you the best score.

[kbl7td]

I'm very new here, however, if I'm reading right you have 50k+ in cc debt and your equity in the home isn't even worth that. I can't even imagine what trouble you'd get into with a HELOC.

Shouldn't your priorities be to pay off that CC debt then, consider a refinance.  

[Shogun]

Don't worry about the util on the car loan, installment loans don't factor in that much for util.  Those revolving debts however, do factor in greatly.  You will want to pay those CCs down.   Yes, pay off 4 and 5.  Then take the amount you've been paying monthly on those and add to one of the others to pay it down quicker.  Paying down the util on revolving accounts will give you a nice score boost.

[Jutz]

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@Shogun wrote:

Don't worry about the util on the car loan, installment loans don't factor in that much for util.  Those revolving debts however, do factor in greatly.  You will want to pay those CCs down.   Yes, pay off 4 and 5.  Then take the amount you've been paying monthly on those and add to one of the others to pay it down quicker.  Paying down the util on revolving accounts will give you a nice score boost.

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+1 and such,

But wouldn't you think getting the cards that are 90%+ paid down would be a priority?  If overall UTIL doesn't matter for revolving, would it be best to pay down so that no card is over, say 60%?  I agree that #1 priority should be getting UTIL down in general, but I'm wondering, especially if he's looking at a HELOC, etc that having no cards near max would look better under manual review.

[Jutz]

After doing the math, apparently 5k isn't going to do much to the overall, perhaps just using it to PIF the two cards might make progress seem a little quicker.  My thought was to try to make the higher balance cards not look so high risk, but the best I could come up with using 5k was:

Balance	Limit	UTIL	PAID	New UTIL
$21,368	$22,000	97.13%	$2,500.00	85.76%
$17,391	$18,400	94.52%	$2,000.00	83.65%
$4,456	$5,000	89.12%	$500.00	79.12%
$16,904	$25,000	67.62%		67.62%
$1,963	$3,000	65.43%		65.43%
$1,263	$1,500	84.20%		84.20%
$63,345	$74,900	84.57%	$5,000.00	77.90%

[Anonymous]

Thanks everyone for the responses so far (especially Shogun).

The interest rates on account #1 is 20%+. The interest rates on accounts #2-#6 are around 12-14%.

Not looking to generate new debts but I am looking take advantage of the lower interest rates of a refi w/ cash out or home equity/HELOC so I can pay down debts faster.

I know the % UTIL count 30-35% of the score. I know some percentage of the UTIL portion is allocated to Total % UTIL and some percentage is allocated to individual CC % UTIL.  Not sure if FICO says the exact breakdown between Total and Individual CC % UTIL as far as this 30-35% affect to the score goes.

Lets say the individual CC % makes up 50% of the UTIL portion.  I reason I can quickly raise my score short term by payoff of accounts #5 and #6 as opposed to paying down on the highest UTIL CC (#1).

Any one with experience or insight into the exact breakdown of individual CC UTIL vs Total CC UTIL?

thanks.

[Jutz]

It's a great question, and probably worth it's own thread in "Understanding FICO"

The only thing I've seen for certain, is the best case scenario is under 9% UTIL with only 1 card reporting a balance.  That would be something I'd try to do if applying for a mortgage, auto loan, etc, but most times <30% with as few cards as possible reporting would be just fine.

Here's another scenario, where you'd pay just a bit more towards the cards, but got two to 0 and everything <90%

Balance	Limit	UTIL	PAID	New UTIL
$21,368	$22,000	97.13%	$1,600.00	89.85%
$17,391	$18,400	94.52%	$900.00	89.63%
$4,456	$5,000	89.12%		89.12%
$16,904	$25,000	67.62%		67.62%
$1,963	$3,000	65.43%	$1,963.00	0.00%
$1,263	$1,500	84.20%	$1,263.00	0.00%
$63,345	$74,900	84.57%	$5,726.00	76.93%