Going from 30% util to 45% util -- effect on FICOs?

[Anonymous]

Okay, like (I hope) a LOT of people do 'round Christmas, we used our CCs. We've gone from roughly 30% util to 45% util. Not usually a big deal, BUT we're in the middle of closing on our first home and we're trying to keep as much $$ in our bank accounts as possible. Every time we turn around, we're paying someone out-of-pocket for Earnest Money, surveys, WDO (wood destroying organisms inspection), and inspections. So, needless to say, what we have in our accounts could very well end up going somewhere else!!

Sooo, does anyone know the effect that going from 30 to 45% util will have on DH's scores? FICO simulator will only let me see what "maxxing out" would do to them (says we would go from 665 to 585-630). So how bad would going from 30 to 45 be?

I guess what I'm asking is what kind of increments does util effect in? Like 100% util is worth (it seems) roughly 60 points, what would 45% util be worth, points wise?

Please forgive me in advance for the stupid question!! Thanks!!

And Duh!! Have an awesome New Year!!

Edited to fix mathematical mistakes!

Message Edited by Wonderin on 12-31-2008 09:59 PM

[Anonymous]

To be more specific:

Cap One $400/$1000 (was previously $413/$1000) <---Used this one for Christmas: paying down from $600

Walmart  $4/$400 (was previously $54/$400)

Orchard Bank $50/$300 (was previously $110/$300)

Wamu $1500/$2500 (was previously $942/$2500) <---Used this one for Christmas: paying down from $2200

Should we just go ahead and pay them all down to lower util? Or would it be safe, FICO-wise, to leave as is?

If we DIDN'T pay any more towards them, how many points do ya'll think we'd lose??

The above scenario would put us at approximately 46% util. As of our last scores/reporting, we're at 36%.

Like I said, we CAN afford to pay this off ... at least, down to 25-30% util. BUT if we could possibly get away with keeping more money in our accounts, all the better!!

***BTW, I realize that we're not really going from 30% to 60% util! My estimate was wrong, obviously!***

[marty56]

If you are keeping the money in your account just to save, you are loosing money because of the CC debt.  If you are saving the money for costs incurred in buying the new home, dont worry about your FICO score now unless you could get a better interest rate in paying down the balances on your CCs.

At this point, applying for any new credit with all this going on is DOA so close on your home, wait for the smoke to clear and then continue to pay down the debt.

Message Edited by marty56 on 01-01-2009 02:34 PM

[ficoschmico]

Don't sweat the mortgage part. Your credit report is good for 120 days minimum. they won't repull unless you switch lenders.

Good Luck.

[GFer]

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@ficoschmico wrote:

Don't sweat the mortgage part. Your credit report is good for 120 days minimum. they won't repull unless you switch lenders.

Good Luck.

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Actually this is lender specific and there is NO guarantee that won't pull credit again. Most lenders say the credit report is good for 60-90 days. Whether or not they pull you credit again depends on the lender and only (sometimes) if they have a reason to.

[Anonymous]

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@marty56 wrote:

If you are keeping the money in your account just to save, you are loosing money because of the CC debt.  If you are saving the money for costs incurred in buying the new home, dont worry about your FICO score now unless you could get a better interest rate in paying down the balances on your CCs.

At this point, applying for any new credit with all this going on is DOA so close on your home, what for the smoke to clear and then continue to pay down the debt.

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We're keeping the money in our accounts because we're hoping to look good on "paper." We've not given them all of our bank statements yet and hoping that once they ask for them, they'll reflect a nice chunk!

So even though we always make humongous payments on our CCs (while we don't always pay in full -- all of our used CCs are 0% interest 'til 2010), we're trying to hold off as long as we can.

Basically, our bank statement cuts on the 8th and our CCs are due/reports to the CRAs on the 12th. So we're hoping to hold out as long as possible. Did that make sense??

[Anonymous]

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@ficoschmico wrote:

Don't sweat the mortgage part. Your credit report is good for 120 days minimum. they won't repull unless you switch lenders.

Good Luck.

---

Our LO told us not to apply for any new credit (no new inquiries OR accounts to factor into our DtI) and not to go nuts with our CCs. She told us that it's very likely that the UW WILL pull our CRs again -- just not sure if she's warning us of a "worst case scenario" and telling us to play it safe, or if it's a definite. :/

[marty56]

I am not sure why the mortgage company is interested in how much money you have in the bank other then for a down payment.  I would still use any extra money I had to pay debt down as long as I didnt need the cash for a down payment and closing cost.

IMHO I dont see enough of a score boost in going from 45% to 30% unless you are close to an interest tier which would say get you a 6.0 interest rate instead of 6.5% interest rate or something similar.

I hope everyhting works out for you.

As a side note, I think you could always re-fi later if your credit suituation improves or do what I did after paying off my CC debt - putting all my extra money into my principle so I can PIF my home in about 5 years from now.

Message Edited by marty56 on 01-02-2009 02:18 AM

[Anonymous]

Thanks for the reply, Marty!

My issue is more along the lines of what going from 30% util to a max of 45%, points-wise. She said that if DH's midscore (currently EX @ 666 -- creepy number, huh?) went below 620, we'd be bumped to a higher rate, something that we don't want since we negotiated like looneys to get the 5% rate we've locked (they were originally giving us 5.5%).

What do you think? I mean, if we went from the 30%-36% threshold of utilization to a higher threshold of 40-45%, would DH's scores sink to 620 (or lower?) -- or would the drop be fairly insignificant?

I'm willing to throw more $$ at the CC debt, but just want to make sure that it'd be worthwhile. Right now, I'm paranoid about the lender (CountryWide) seeing so much money traveling out of our accounts.

Yep, I'm just paranoid, I'm sure. But that's me!! If I wasn't paranoid about all of this, I'd not have a pulse!!

[haulingthescoreup]

I'm hoping that we'll hear from someone who has gone through this identical util change, but in attempting to keep track of all the educated guesses about util change, it has become apparent that there are "tiers" of util, so to speak, where movement within a tier doesn't change scores, but movement to a higher or lower one does.

So that's assumption #1. Assumption #2 is the suggested range of util tiers, if indeed there are such things:
0 - 9%
10 - 19%
20 - 29%
30 - 49%
50 - 84% ??? --get's really guess-y here!
85% and above = maxed

Assumption #3 is that if there are tiers, and if these are the tiers, these hold true for all score buckets and credit profiles. And that's a big guess right there (witness all the debate about whether you do better to be 3% or less.)

If all these are true, then you might not see a score change to go from 30% to 45%, as this is within a tier, but it's an awfully shaky foundation. I'd be pleasantly surprised if it held true.