% Balance to % of Credit Limit for Score Increases

[Anonymous]

Thanks Timothy! I knew someone would come by to help OP out since it was posted in rebuilding. I'm still learning what is what on scoring.

[Anonymous]

Thank You everyone for your responses thus far.  I want to pay down some accounts tomorrow - the question is fuguring out which ones give me the most 'bang for the buck'.

The Bank of America unsecured credit line is showing as a Revolving account.  Does this mean that it counts the same as a credit card?  If it is, then I should't max it out to pay off the other cards - or should I?  I would very much like to know this answer.  I wouldn't want to cut off my nose to spite my face by clearing up all the others then having my score drop for being totally maxed out on one card.

SmallFry says to that the 'magic point' numbers are 8% and 15% of balance while Timothy is saying 9% and 19% for the score boosts.

I can deal with the difference between 8-9% as the difference is small and pay the Citibank down to 8%.  If the next cut off is at 15% then I don't need to touch the FNANB and I can bring the Wells Fargo, Chase & Discover down slightly.

If Timothy is right and there is no difference between 15% and 19% of limit then I would just as soon not touch anything that is under 19% and work on the bigger numbers like the 29, 32 and 40%s.  But I can make a difference on less accounts if I concentrate only on those three.

Thoughts?

How much of a difference does it really make to have less accounts with balances?  I was always told to spread the balances amongst several accounts versus maxing others out.  Was that wrong?  I have heard that lots of times.  Now some of you fine folks are telling me to clear as many accounts to zero as I can and max out one or two.  I don't know who to believe.  Please help!

My score was 700, but has gone down recently due to too many inquiries by the mortgage companies.  I told them to stop pulling my report.  Now I need to do what I can to get my score back up to about 720 as I need mortgages on investment properties.

Thank you for your advice - I am looking forward to hearing more.

[Anonymous]

The 50K revolving account is IGNORED in scoring-

So don't worry about maxing it out !!!!!!!!!!!

[Anonymous]

Timothy - Today is my first day as a new subscriber and I didn't know where to post it.  Wasn't sure how many people looked at each section and wanted to be sure to receive some replies - wasn't sure if I'd get any at all so that is why I posted in so many places.

[Anonymous]

Timothy - Why is the B of A credit line ignored if it is revolving?  My credit cards are revolving and they count.  I don't get it?

[Anonymous]

As you are new-

I would not expect you to understand- you have to trust me.

An element in FICO scoring tells it to ignore revolving Utility  on High CL's -

A CC, LOC or HELOC 50K+ is ignored in scoring-

This is good for you though- you can get a quick FICO boost by using the LOC-

Your revolving credit cards DO count-

If the LOC had a 40K CL- it WOULD count !!!!!!!!!!

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RealtorGal wrote:

Timothy - Why is the B of A credit line ignored if it is revolving?  My credit cards are revolving and they count.  I don't get it?

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[smallfry]

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@Anonymous wrote:

Timothy - Why is the B of A credit line ignored if it is revolving? My credit cards are revolving and they count. I don't get it?

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Supposedly FICO doesn't count lines of 50K and above in their utilization.

[Anonymous]

Wow, that is really cool - I will max it out tonight!

How sure are you on the cut off %s for differences in score?  Like is 15% definitely better than 19% or do they weigh the same?  Would 8% get me a boost, but 9% wouldn't, etc.?  How sure are you on those numbers or are you just guessing?  I don't mean to sound like I'm doubting you, I just don't want to pay three cards down to 19% then find out it didn't make a difference in score because I needed to go to 15%, etc.

That is something I really want to know.

Also, how about my question about the number of cards with balances - I have always been told to spread the balances around a larger number of cards rather than have one card with too high of a balance.  If the B of A credit line did not exist, what would your advice be then?

Thank You!!!

[Anonymous]

This brings up another question. I have 4 HELOCs with limits and balances below $50,000.  I did not think that they counted HELOCs like they do credit cards.  I thought they counted like regular mortgages.  They are all maxed out because I just bought the houses recently doing 80% firsts and 10% second mortgages.  I paid $1,000 off of each loan so that they would never go over their limits.  Are they what is counting against me?  I can't possibly pay those down.

The worst thing is that two of the properties are in declining markets and they froze the credit lines.  Every time I make a payment, they reduce the credit line so I will never not be maxed out.

Thoughts?

Am I fighting an upstream battle?

[smallfry]

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@Anonymous wrote:

Wow, that is really cool - I will max it out tonight!

How sure are you on the cut off %s for differences in score? Like is 15% definitely better than 19% or do they weigh the same? Would 8% get me a boost, but 9% wouldn't, etc.? How sure are you on those numbers or are you just guessing? I don't mean to sound like I'm doubting you, I just don't want to pay three cards down to 19% then find out it didn't make a difference in score because I needed to go to 15%, etc.

That is something I really want to know.

Also, how about my question about the number of cards with balances - I have always been told to spread the balances around a larger number of cards rather than have one card with too high of a balance. If the B of A credit line did not exist, what would your advice be then?

Thank You!!!

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Open to discussion what the exact numbers are for utilization and scoring. I live under 4% now individual and total so its a non starter for me. It is important to have less than half of all your total open accounts to report with zero balances. Best to get your utilization under 9% on each card reporting a balance and 9% total. Installments don't figure into utilization. Maxed out installments don't help. Paying them down helps slightly.