I would recommend reading the below from ABCD2199
The Truth about Credit Card Utilization
My 11 Rules to Credit Rebuilding
FICO Score: What to pay down first?
From Birdman7
General Scoring Primer and Version 8 Master Thread rev.5.17.20
It depends on a few factors:
Available funds
Interest rate per card
Individual utilization
Aggregate utilization
FICO scoring model
Available funds
Interest rate per card
Individual utilization
Aggregate utilization
FICO scoring model
@tradinglife wrote:Trying to get my score up, right now i'm at 68% across the board on my card utilization. ( 6 cars, $15,000 balance). ive been paying all cards down from 100% to 88% to 68% utilization. At this point is it better to pay a small card down to nothing or keep going across the board and paying each card down to next utilization level. Its easier to pay down a card with a $2,000 limit to nothing versus payng $1,000 on a card with $10,000 limit doesnt move the needle much. Any thoughts on this?
From a FICO 8 scoring perspective I think it's better to keep paying them down across the board on a percentage basis. Get each card down to 58% then 48% then 38% and so on. Once you've got them all down to 28% or less, then work on zeroing them out.
If you're not looking at it from a scoring perspective but instead from the perspective of getting out of debt, then I would recommend the snowball method:
1. Stop using cards.
2. Pay off smallest balance first, then next smallest, and so on.
3. On other cards pay minimum + something each month.
As each balance turns to zero, that will free up your remaining monthly cash to apply to the next smallest balance.
