@DSTforlife wrote:Hi,
I have a question for the myFICO community. I used to frequent these boards religiously back in 2012-2015. I am back with a question for my sister who is wanting to purchase a house. She is currently a homeowner and is putting her home on the market. I haven't been paying much attention to FICO scores for the last few years, and my knowledge is now a bit rusty. :-)
The issue is her mid score is 630 and she wants to be at 680 or higher. On her credit file, the only thing I can see is her revolving ultilization is high. She doesn't have any collections, no charge-offs. The only baddie on her report is 1 late payment (January 2017).
Her total revolving debt is $58k, and her aggregate utlilization is currently at 75%. She has $32k available to pay towards credit cards, but her concern is how best to do it. Should she put it all towards the revolving debt, or should she take some of the funds and continue padding her savings. We have been scouring the myFICO boards, but it seems like the mortgage FICO scoring is still a huge mystery.
My question is if she puts the full $32k to her revolving debt, do you think she can get at least a 50 point bump 680 (her mid score is EQ)? I've been reading the there are thresholds for FICO8. Should we use those thresholds as a guide and once we calculate total ultilization down below 48%, take after is left and keep it in savings?
All advice is greatly appreciated.
She should apply it to her revolving debt. That will really light a fire under her mortgage scores.
She'll save a lot of money in interest with higher scores.
She should get everything down to 48% or less, then 28% or less, and then start zeroing out accounts.
@DSTforlife wrote:thank you for your reply. do you mean start by paying down each individual trade line to 48% or the aggregate total down to 48%?
Each individual account.
when she and i were talking about how to do it, i recommended that she gets as many individual accounts to zero as possible.
I used to advise that, too, but then through testing of my accounts -- which was corroborated by several other forum members -- we learned that getting rid of 50% or higher balances gave mortgage scores an even more significant boost.
she has a couple with higher balances, and i recommended that she not pay those off, but pay it down somewhat (i'm not sure if it would be below 48%). she has about 8 in total, and we talked about getting half of them down to zero and leaving balances on the other half. this is the stuff i'm fuzzy on.
Unfortunately, I don't have have her balance to limit details in front of me and i can't remember them. I'll try to get that info from her and post later.
She should first get each account down to 48% or less. Then she should get each account down to 28% or less. Then, if she has anything left, she should start zeroing them out.
thank you!
She sent me her info last night, and I took the time to create a spreadsheet showing how best to optimize her pay-downs. This is what I came up with. I took both of your advice and brought all of her cards down to 48% and then with what was left over, brought other cards directly to zero. I skipped over 28% altogther since zero balances are more important. Here is what i came up with. She has 14 tradelines....not sure where I got 8 from. 
But, anywho, this gets her down to having 8 tradelines with balances at 48% or lower, and 6 with zero balance. do you think this is the right approach?
I'm thinking about charging her a credit analysis fee for my troubles. 
| Trade Line | credit limit | 48% balance | current balance | amount to pay to get to 48% | balance left | additional amount to pay to get to 0 | TOTAL TO PAY ON EACH CARD | FINAL BALANCE LEFT | % Util |
| TL 1 | 2,500 | 1,200 | 1,526 | 326 | 1,200 | 326 | 1,200 | 48.0% | |
| TL 2 | 2,000 | 960 | 1,757 | 797 | 960 | 960 | 1,757 | - | 0.0% |
| TL 3 | 4,500 | 2,160 | 4,026 | 1,866 | 2,160 | 1,866 | 2,160 | 48.0% | |
| TL 4 | 7,500 | 3,600 | 5,887 | 2,287 | 3,600 | 2,287 | 3,600 | 48.0% | |
| TL 5 | 16,000 | 7,680 | 14,031 | 6,351 | 7,680 | 6,351 | 7,680 | 48.0% | |
| TL 6 | 5,500 | 2,640 | 4,400 | 1,760 | 2,640 | 1,760 | 2,640 | 48.0% | |
| TL 7 | 9,000 | 4,320 | 7,800 | 3,480 | 4,320 | 4,320 | 7,800 | - | 0.0% |
| TL 8 | 2,600 | 1,248 | 1,600 | 352 | 1,248 | 1,248 | 1,600 | - | 0.0% |
| TL 9 | 2,500 | 1,200 | 1,058 | - | 1,058 | - | 1,058 | 42.3% | |
| TL 10 | 5,400 | 2,592 | 2,054 | - | 2,054 | - | 2,054 | 38.0% | |
| TL 11 | 10,000 | 4,800 | 9,160 | 4,360 | 4,800 | 4,360 | 4,800 | 48.0% | |
| TL 12 | 6,000 | 2,880 | 5,641 | 2,761 | 2,880 | 2,880 | 5,641 | - | 0.0% |
| TL 13 | 1,100 | 528 | - | - | - | - | 0.0% | ||
| TL 14 | 3,900 | 1,872 | - | - | - | - | 0.0% | ||
TOTAL | 78,500 | 37,680 | 58,940 | 24,340 | 34,600 | 9,408 | 33,748 | 25,192 | 32.1% |
| % utilization (aggregate) | 75.08% | 44.08% | 32.09% |