@MOSHIE wrote:Hello.
I apologize firsthand if this might not be in the correct section as it involves credit cards and auto-loans but moreso on scoring based on the way I approach my problem, which is how to effectively pay my CCs for best scoring.
I have the following CCs open;
- Apple Card (CL 1950) - 98%
- Best Buy/Citi (CL 1000) - 85%
- Capital 1 Platinum (CL 1500) - 90%
- Capital 1 QS (CL 2000) - 92%
- Discover (CL 2400) - 95%
- Discover (CL 1800) - 95%
- FNBO/Fidelity (CL 2800) - 98%
The reasoning for these near maxed out utilities? COVID and pretty much have been carrying these balances for a while until I got my things sorted out. I do have an AMEX account that was cancelled and is on a payment plan with them directly, balance of $811.
That being said, the goal is to raise my score as effectively as possible by Mid July - early August. By early August I have to return my lease and is interested in getting a new car. As far as down-payment and etc goes regarding auto loans, that's another story but here is what I had planned out.
This month (March as of writing), I am planning on PIF the FNBO as that is the highest balance and would take out a pretty huge chunk of the remaining balance. Early next month, I am going to PIF the Apple Card. As far as the Discover that has 2400 CL, I will pay that off on May. So this gives me around 2.5 months - 3 months to deal with the rest. Should I just evenly spread out a fixed monthly payment to take care of them or PIF one at a time for best scoring?
I am trying to avoid applying for a consolidation loan as I don't want a hard inquiry before go apply for the car.
Do you recommend other alternatives to get the best scoring? Get everything below 70%? 50?
Advice greatly appreciated as I am pretty new to the scoring that FICO does regarding CCs.
Thank you
IMHO your best approach would be in this order:
1. Get all accounts down to 88%
2. Then 78%, then 68%, then 58%, then 48%.
3. Once you've got everything down to 48%, snowball... i.e. zero out smallest balance, then next smallest, etc.
Don't be surprised if one or more of your creditors starts balance chasing you (lowering the limits as you pay down). If it happens, there's realistically nothing you can do about it, except live with it and keep with the plan.
@MOSHIE wrote:
@Thomas_Thumb wrote:
@MOSHIE wrote:Hello.
I apologize firsthand if this might not be in the correct section as it involves credit cards and auto-loans but moreso on scoring based on the way I approach my problem, which is how to effectively pay my CCs for best scoring.
I have the following CCs open;
- Apple Card (CL 1950) - 98%
- Best Buy/Citi (CL 1000) - 85%
- Capital 1 Platinum (CL 1500) - 90%
- Capital 1 QS (CL 2000) - 92%
- Discover (CL 2400) - 95%
- Discover (CL 1800) - 95%
- FNBO/Fidelity (CL 2800) - 98%.
This month (March as of writing), I am planning on PIF the FNBO as that is the highest balance and would take out a pretty huge chunk of the remaining balance. Should I just evenly spread out a fixed monthly payment to take care of them or PIF one at a time for best scoring?
Do you recommend other alternatives to get the best scoring? Get everything below 70%? 50?
Advice greatly appreciated as I am pretty new to the scoring that FICO does regarding CCs.
Thank you
Similar to what SJ said but, I would suggest taking one card to $0 a little earlier in the process. Not having all accounts with a balance may help minimize balance chasing.
First, get all cards below 89% UT and next below 69%. Then pay off the Best Buy card so one account shows a zero balance. I suggest BBY because it has the smallest balance, is less likely to balance chase because BBY wants their card used and the card probably has one of the highest APRs.
After that, pay all remaining cards to below 49%. That should provide a nice score boost. Then focus on paying target cards to zero while making 2x minimum payments on other cards.
I'd prioritize based on highest APR. If possible, only use cards that have been paid to zero and are no longer in the interest penalty phase.
Thank you for replying and I do apologize if this is a dumb question but everyone that replied, basically said get below 87%, 88% and 89%. Now I'm sure there's something about the FICO scoring that I'm not familiar about but why the odd numbers? Why not increments of 5 as in, 90%, 85%, 80%? Please educate me.
Because 90% is believed to have a penalty, whereas 89% would be below that threshold. And 89% might get rounded up to 90%. That's why I advise 88%.
My FNBO statement will cut on the 21st and that will be reduced to 0. So I guess that's the first account to go to 0. Secondhand, regarding everyone's advice here, I may just not reduce Discover to $0 but to spread that payment evenly across the cards to get it below 80%. My goal is by Mid-July and August, I'll get to below 50% UTIL or so that my score recovers and I can get another auto loan. I will note on the 2x minimum payment though.
Thank you to everyone else! @JoeRockhead @RSX @SouthJamaica but please if you don't mind educate me on the numbers of %UTIL that you guys adviced I reduced to. I really don't get why such an odd number, haha.
@MOSHIE wrote:
@Thomas_Thumb wrote:
@MOSHIE wrote:Hello.
I apologize firsthand if this might not be in the correct section as it involves credit cards and auto-loans but moreso on scoring based on the way I approach my problem, which is how to effectively pay my CCs for best scoring.
First, get all cards below 89% UT and next below 69%. Then pay off the Best Buy card so one account shows a zero balance. I suggest BBY because it has the smallest balance, is less likely to balance chase because BBY wants their card used and the card probably has one of the highest APRs.
After that, pay all remaining cards to below 49%. That should provide a nice score boost. Then focus on paying target cards to zero while making 2x minimum payments on other cards.
I'd prioritize based on highest APR. If possible, only use cards that have been paid to zero and are no longer in the interest penalty phase.
Thank you for replying and I do apologize if this is a dumb question but everyone that replied, basically said get below 87%, 88% and 89%. Now I'm sure there's something about the FICO scoring that I'm not familiar about but why the odd numbers? Why not increments of 5 as in, 90%, 85%, 80%? Please educate me.
Thank you to everyone else! @JoeRockhead @RSX @SouthJamaica but please if you don't mind educate me on the numbers of %UTIL that you guys adviced I reduced to. I really don't get why such an odd number, haha.
The 1st step is to get all cards below the threshold designated as a "max out" condition. This is generally believed to be 90% utilization. However, Fico rounds numbers up. Thus, I advise below 89% as a benchmark. Individual card utilization appear to be banded in increments such as 90% and above, 70%-89%, 50% - 69%, 30% - 49%, 10% - 29% and 9% or less. That is why I mention 89%, 69%, 49%, 29% and 9% for utilization benchmarks. [I don't see a score impact on an individual card utilization in the 0% to 29% level. However under 9% is considered important, particularly for aggregate utilization.]
I received the below from Experian on one of their credit reports with scores in 2016. These comment boxes provide some added insight on scoring factor thresholds but, are no longer offered on EX reports. @SouthJamaica note the mention of 7 years 8 months for AAoA.
