Credit Card Rebuilding - Unexplained predictor results for consolidation?

[Anonymous]

So I'm currently working on rebuilding my credit after getting a new job and I'm now more able to aggressively pay down my cards. I got my credit scores from myFICO today to see where I'm currently at (mid 600s), so I can figure out if anything beyond simply paying off my cards can help my score. I'm trying to understand something about what I came across today when looking at the Analyzer possibilities.

Right now I have about 5-6 cards with 70% utilization on them with excess of 5 figure CC debt overall. When I trying the different analyzer options, I found a "Consolidate all CC debt onto one card" option effectively. Just simply doing this according to the analyzer would increase my credit score above 700, but I can't figure out why. I did a number of permutations that didn't result in any debt actually being paid, and none of the options would result in such an increase.

I thought I have a pretty good understanding of how credit scoring works, but I'm quite flustered on being able to explain how consolidation to one card and still having a overall high utilization could result in such a drastic jump. For kicks, I also tried it on identityguard's analyzer and it came to the exact same conclusion. Anyone have any ideas?

[Anonymous]

It's my understanding that part of our score has to do with total utilization (so owing less that a certain percentage of your total credit available) and another component has to do with the percentage of your cards with a balance on then so by consolidating your entire balance onto one card you would gain the points from having less than 50% of your cards with a balance.

[Anonymous]

The above reply is correct, that part of the reason could be the number of cards with balances and the individual card balances.  Take what simulators say with a grain of salt, though, as they are known to be quite inaccurate on many occasions.

Paying down debt is paying down debt and doing so will increase your scores.  Depending on where your aggregate utilization sits currently, it's not out of the question to think you could get to 700+ in paying down your utilization.  What is your current aggregate utilization?  In going from maxed-out aggregate to ideal (1%-8%) utilization, it's not uncommon for people to report around 100 points gained depending on profile.  If you're around 50% overall, that could be 50 points toward your score... again, just ballpark from the hip estimates here without knowing a thing about your profile. 

[SouthJamaica]

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@Anonymous wrote:

So I'm currently working on rebuilding my credit after getting a new job and I'm now more able to aggressively pay down my cards. I got my credit scores from myFICO today to see where I'm currently at (mid 600s), so I can figure out if anything beyond simply paying off my cards can help my score. I'm trying to understand something about what I came across today when looking at the Analyzer possibilities.

Right now I have about 5-6 cards with 70% utilization on them with excess of 5 figure CC debt overall. When I trying the different analyzer options, I found a "Consolidate all CC debt onto one card" option effectively. Just simply doing this according to the analyzer would increase my credit score above 700, but I can't figure out why. I did a number of permutations that didn't result in any debt actually being paid, and none of the options would result in such an increase.

I thought I have a pretty good understanding of how credit scoring works, but I'm quite flustered on being able to explain how consolidation to one card and still having a overall high utilization could result in such a drastic jump. For kicks, I also tried it on identityguard's analyzer and it came to the exact same conclusion. Anyone have any ideas?

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Analyzers in general, and whatever analyzer you are looking at, are full of baloney. Please disregard. Do not 'consolidate' anything. And do not apply for anything.

What you should do is pay down your cards so that (a) all but one of the cards report a zero balance and (b) the one card that does report a balance reports a small balance, preferably 9% or less but certainly 29% or less.

[Anonymous]

My profile is relatively straight forward. No baddies, late payments or anything. Mid 600s for current scores and 45-50% utilization across the board. 10 Years of established history, with student loan payments and a car loan in the mix in the past. Simply paying down my utilization to 10% on the simulators puts me over 800 score. Which makes some sense in consideration the rest of my profile is pretty great.

I'm looking at getting a car loan or lease in the short term, so just trying to figure out if there are any tricks I can utilize. Shifting one or two of the balances from other cards onto my NCFU and maxing that utilization make make a slight difference from what I understand of how my score is calculated.

[Anonymous]

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@Anonymous wrote:

My profile is relatively straight forward. No baddies, late payments or anything. Mid 600s for current scores and 45-50% utilization across the board. 10 Years of established history, with student loan payments and a car loan in the mix in the past. Simply paying down my utilization to 10% on the simulators puts me over 800 score. Which makes some sense in consideration the rest of my profile is pretty great.

I'm looking at getting a car loan or lease in the short term, so just trying to figure out if there are any tricks I can utilize. Shifting one or two of the balances from other cards onto my NCFU and maxing that utilization make make a slight difference from what I understand of how my score is calculated.

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Several replies above have told you that simulators are garbage, so if you choose to trust their estimations be prepared to be disappointed.  Especially in your case.  Paying down utilization that sits at 45%-50% to 10% under no circumstances would ever raise a credit score from "mid 600s" to "over 800."  Even completely maxed out utilization being brought down to ideal utilization would be quite a stretch to pick up that amount of points.  If you don't have any current open installment loans, employing the SSL technique is a quick way to scoop up 25 points or so on your scores.

[Anonymous]

When these simulators suggest that you "consolidate" your debt onto one card, I assume that this means doing balance transfers.  Is that right?

If so, there is typically a significant fee for doing that.  A typical fee, according to this article is 3%:

   http://www.creditcards.com/credit-card-news/help/9-things-you-should-know-about-balance-transfers-60...

The folks here can help you best if you indicate when you want to buy the car, what your current CC debt is, and how much money you'd have available between now and then to pay down the debt.  Even better would be for us to know the current balance and credit limit of each card.

You mention that the debt is a "five figure" debt, but that might be 12k or 88k.