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2 maxed out credit cards

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Remedios
Credit Mentor

Re: 2 maxed out credit cards


@Anonymous wrote:

Cards just went up during the holidays. But score wise, I wanted to know if i should pay off one in full or 1/2 on both. Which option would give me the best increase in score.


Both. If you pay down only one, score may not improve by much or at all, as long as the other card is maxed out. 

 

Good luck 

Message 11 of 17
HeavenOhio
Senior Contributor

Re: 2 maxed out credit cards

Welcome, @Anonymous. Smiley Happy

 

For scoring purposes, bring them both down evenly. Get them to 27% or below so the following month's interest doesn't bump you over the 28.9% threshold mentioned above.

Message 12 of 17
wdkwang
Contributor

Re: 2 maxed out credit cards

As recommended by others, pay down the 2 cards to at least <30% utilization (or ideally <10% utilization) before pursuing the car purchase. You should see a fairly significant boost in your CS once your monthly scores update. To my knowledge, the best interest rate for an auto loan requires a FICO score of 720+. Paying off your 2 cards first will also give you the headroom needed in case of any emergency expenses while you have an auto loan.

Chase Sapphire Reserve 34K | Chase Freedom Unlimited 28K | Chase Amazon 25K
Chase IHG 8.5K | Chase Freedom 5K | Chase Sapphire 3K
Bank of America Cash 40K | Bank of America Travel 40K
AMEX Delta Gold 30K | AMEX Everyday 25K | AMEX Delta 13K | AMEX Blue Cash Everyday 2.62K
Citi Rewards Plus 31K | Citi ThankYou Premier 18.7K
PenFed Pathfinder 5K | PenFed Platinum 5K
City National Bank Crystal Visa 15k
TD Cash 14K | Uber Visa 13K | USBank Cash+ 10K
Wells Fargo Cash Wise 6.5K | Discover IT 5.2K
Overstock 13K | Target RedCard 2.5K | Victoria Secret Angel 1K | LOVE LOFT .25K
BP Visa 5K | Walmart MC 3.3K

08/18: TCL 246.95K | AoOA: 18Y | AAoA: 5.0Y || TU: 820 | EQ: 823 | EX: 815 || INQ - TU: 3 | EQ: 3 | EX: 7
12/18: TCL 386.95K | AoOA: 18Y | AAoA: 3.1Y || TU: 805 | EQ: 813 | EX: 769 || INQ - TU: 5 | EQ: 4 | EX: 10
11/19: TCL 421.55K | AoOA: 18Y | AAoA: 4.2Y || TU: 818 | EQ: 820 | EX: 794 || INQ - TU: 6 | EQ: 5 | EX: 9
Message 13 of 17
HeavenOhio
Senior Contributor

Re: 2 maxed out credit cards

Note that "below" 30% means 28.9% or less, and "below" 10% means 8.9% or less. All cards at 28.9% or less is a good look. If you're at that point and still need a bump, start bringing individual card balances to zero while making sure that one card still shows a positive balance.

 

If you want to cut to the chase and get the best score possible, implement AZEO (all zero except one). That's where a small balance (at least $5 but not much more) is left on one card with the rest reporting zero.

Message 14 of 17
SouthJamaica
Mega Contributor

Re: 2 maxed out credit cards


@Anonymous wrote:

I have to maxed out cards. Does it make more since to pay one off, and make payments on the other. Or pay 1/2 on each card, and continue to make payments on both cards. I need my CS to increase for a car purchase.


Get both down to 48% or less, then get both down to 28% or less, then pay one off.


Total revolving limits 741200 (620700 reporting) FICO 8: EQ 701 TU 704 EX 685

Message 15 of 17
UncleB
Credit Mentor

Re: 2 maxed out credit cards


@Anonymous wrote:

Cards just went up during the holidays. But score wise, I wanted to know if i should pay off one in full or 1/2 on both. Which option would give me the best increase in score.


Since your thread is regarding a scoring question I'm moving the thread to 'Understanding FICO Scoring' for additional exposure.

 

--UB

Message 16 of 17
Anonymous
Not applicable

Re: 2 maxed out credit cards

Thanks everyone for the input. I will move forward with paying both down. Have a freat week!

Message 17 of 17
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