Line of credit and cc question

[nate79416]

I have 2 revolving accts, I'm trying to gain atleast 15 more pts, I have a cc limit is 3500 I owe 520, I also have a loc limit is  2500  I owe 2205, should I pay down the loc,(how much) and get the cc under 9% usage, or just pay down the loc?  I can not open up anymore lines right now(trying to buy a home)

Thanks

[Revelate]

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@nate79416 wrote:

I have 2 revolving accts, I'm trying to gain atleast 15 more pts, I have a cc limit is 3500 I owe 520, I also have a loc limit is  2500  I owe 2205, should I pay down the loc,(how much) and get the cc under 9% usage, or just pay down the loc?  I can not open up anymore lines right now(trying to buy a home)

Thanks

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If you can spare the cash, zero out the LOC before paying additional on the CC if we're talking pure FICO maximization, or pay off the CC and kick as much as possible to the LOC.  Right now the utilization on the LOC is hurting probably non-trivially.

If you can't afford to write the check for the balance, would suggest posting how much you have to work with and we can try to give you some good advice tailored on that.

[nate79416]

I have close to 8k in the bank, I can pay it off, or a big chunk of it, but my concern is will my lender want to see closing cost and down payment in the bank now, or will they want to see it in my bank a few weeks before closing, it will take about 5 months to build our home, my cu is saying they will pay all closing cost, one of the builders lenders only offers $1000 off closing, plus I need 3.5% down, ofcourse I will continue to save during building, soooo Idk what to do.I just know I need 15pts Please advise thanks

[nate79416]

We are not going over 200k for a home so we are looking at a down payment of 7k and under.

[Revelate]

Think they want to see it in the account right now, but if you're short FICO...

Pay off the credit card for $520, and kick $230 to the LOC which still leaves you north of 7K in hand.  The $230 is kind of a swag but it takes it below 80% which we've never really pinned down as a maxxed out card line to my knowledge but that was the number everyone kept talking about when I started here but never saw a good test personally.

I do know 97% is bad, and 93% was reported bad, and I had a 73% report which made no score change from $3 or back to $40ish on that tradeline, but I don't have good data points between those two numbers, so I'd hedge somewhere <80% if I only had the short time period to optimize.

The problem you run into is that's still non-trivial aggregate utilization, can you wait a month or two to get that paid off from a home purchase perspective or maybe look for gift funds from a parent for the downpayment source?

[nate79416]

I sent an email to my LO asking if we need the money in the bank now or a few weeks before closing, silly me I never thought my loc was affecting my uti. Ofcourse if we have to wait, then it is what it is.

[NRB525]

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@nate79416 wrote:

I have 2 revolving accts, I'm trying to gain atleast 15 more pts, I have a cc limit is 3500 I owe 520, I also have a loc limit is  2500  I owe 2205, should I pay down the loc,(how much) and get the cc under 9% usage, or just pay down the loc?  I can not open up anymore lines right now(trying to buy a home)

Thanks

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Well, I would not pay off the LOC completely, because that creates a loss of the payment history, and a negative move in your score.

I also do not think the credit card should be let to go zero either. Zeros on all cards is a negative, will lose you points, full stop.

I would just try to pay down the LOC to below 50% and keep the credit card PIF and at about that $500 balance from daily spend. Anything more drastic than that is likely to use too much funds and/or result in an unintended negative if one or both of these two balances goes to zero.

[Revelate]

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@NRB525 wrote:

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@nate79416 wrote:

I have 2 revolving accts, I'm trying to gain atleast 15 more pts, I have a cc limit is 3500 I owe 520, I also have a loc limit is  2500  I owe 2205, should I pay down the loc,(how much) and get the cc under 9% usage, or just pay down the loc?  I can not open up anymore lines right now(trying to buy a home)

Thanks

---

Well, I would not pay off the LOC completely, because that creates a loss of the payment history, and a negative move in your score.

I also do not think the credit card should be let to go zero either. Zeros on all cards is a negative, will lose you points, full stop.

I would just try to pay down the LOC to below 50% and keep the credit card PIF and at about that $500 balance from daily spend. Anything more drastic than that is likely to use too much funds and/or result in an unintended negative if one or both of these two balances goes to zero.

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LOC's are revolving not installment, why would it suddenly lose payment history? 

[NRB525]

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@Revelate wrote:

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@NRB525 wrote:

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@nate79416 wrote:

I have 2 revolving accts, I'm trying to gain atleast 15 more pts, I have a cc limit is 3500 I owe 520, I also have a loc limit is  2500  I owe 2205, should I pay down the loc,(how much) and get the cc under 9% usage, or just pay down the loc?  I can not open up anymore lines right now(trying to buy a home)

Thanks

---

Well, I would not pay off the LOC completely, because that creates a loss of the payment history, and a negative move in your score.

I also do not think the credit card should be let to go zero either. Zeros on all cards is a negative, will lose you points, full stop.

I would just try to pay down the LOC to below 50% and keep the credit card PIF and at about that $500 balance from daily spend. Anything more drastic than that is likely to use too much funds and/or result in an unintended negative if one or both of these two balances goes to zero.

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LOC's are revolving not installment, why would it suddenly lose payment history? 

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Loss of payment history not the correct term: Going to a zero balance more appropriate.

Going to a zero balance on one or both accounts, very negative result, very big shock to the FICO score short term.

[Revelate]

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@NRB525 wrote:

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@Revelate wrote:

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@NRB525 wrote:

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@nate79416 wrote:

I have 2 revolving accts, I'm trying to gain atleast 15 more pts, I have a cc limit is 3500 I owe 520, I also have a loc limit is  2500  I owe 2205, should I pay down the loc,(how much) and get the cc under 9% usage, or just pay down the loc?  I can not open up anymore lines right now(trying to buy a home)

Thanks

---

Well, I would not pay off the LOC completely, because that creates a loss of the payment history, and a negative move in your score.

I also do not think the credit card should be let to go zero either. Zeros on all cards is a negative, will lose you points, full stop.

I would just try to pay down the LOC to below 50% and keep the credit card PIF and at about that $500 balance from daily spend. Anything more drastic than that is likely to use too much funds and/or result in an unintended negative if one or both of these two balances goes to zero.

---

LOC's are revolving not installment, why would it suddenly lose payment history? 

---

Loss of payment history not the correct term: Going to a zero balance more appropriate.

Going to a zero balance on one or both accounts, very negative result, very big shock to the FICO score short term.

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Where are people getting this information?  Going to zero on both accounts absolutely, demonstrated over and over again; however, paying off one of the two revolving lines?

Why are we suddenly in such a rush to throw out massive volumes of data over, what exactly?  I'm fully willing to admit the vast majority of people attempting to play with the algorithm in order to better understand it might well be wrong, but we keep getting reports every week of people who experience precisely what has been found via overwhelming anecdotal data.

It's not like this is a hard thing to test.