Multiple Tradelines/Utilization Scoring Questions

[team_audi]

Hello, I have some questions about what if scenarios with my credit cards to get the best improvement on my score.

Here is my credit picture. These are my cards

$1,900 out of 3,000 limit
$1,700 out of 2,800 limit
$5,600 out of 10,000 limit
$6,300 out of 10,000 limit
$3,600 out of 5,000 limit
$600 out of 1,800 limit
$800 out of 2,000 limit
$600 out of 3,200 limit

I am questioning what would happen if I balanced transferred to my higher limit cards to reduce my utilization on the other cards to less then 30% or even 10% or under but increase to near 75-80% on one or two cards?

Basically if I paid all my cards down to under 10% and almost maxed out my 10,000 limit card/cards would I see an increase in my scores? Right now I am at 53% I believe overall ultilazation. It seems that the scoring system seems to look at each account and total overall, which one is greater?

My scores are 636 EQ 641 TU 659 EX also note I have a 2 year old BK and past Derogatory late payments from 5 years ago. That's what is keeping my scores down. Overall I want to increase my scores for whatever i am able to by figuring out what to do with my balances. I am paying over 1,000 total a month on all my credit cards as well to pay more then the min.

Any help would be appreciated. Sorry if I posted in the wrong forum.

Matt

[bdhu2001]

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@team_audi wrote:
Hello, I have some questions about what if scenarios with my credit cards to get the best improvement on my score.

Here is my credit picture. These are my cards

$1,900 out of 3,000 limit
$1,700 out of 2,800 limit
$5,600 out of 10,000 limit
$6,300 out of 10,000 limit
$3,600 out of 5,000 limit
$600 out of 1,800 limit
$800 out of 2,000 limit
$600 out of 3,200 limit

I am questioning what would happen if I balanced transferred to my higher limit cards to reduce my utilization on the other cards to less then 30% or even 10% or under but increase to near 75-80% on one or two cards?

Basically if I paid all my cards down to under 10% and almost maxed out my 10,000 limit card/cards would I see an increase in my scores? Right now I am at 53% I believe overall ultilazation. It seems that the scoring system seems to look at each account and total overall, which one is greater?

My scores are 636 EQ 641 TU 659 EX also note I have a 2 year old BK and past Derogatory late payments from 5 years ago. That's what is keeping my scores down. Overall I want to increase my scores for whatever i am able to by figuring out what to do with my balances. I am paying over 1,000 total a month on all my credit cards as well to pay more then the min.

Any help would be appreciated. Sorry if I posted in the wrong forum.

Matt

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I wouldn't do a balance transfer without calculating the cost. Will the balance transfers cost you 2% or 5% for the transfer?  In addition, I would stop charging and knock down the # of cards reporting & % of utilization. When I state stop charging, I mean :

• develop a budget to pay off all your accounts and covers your expenses
• pay the amount listed in budget plus all new charges (i.e your budget list $50 to acct A and you charged $120.  Pay $170 to acct till it's paid off).
• If your current use is 53% get every card below 40% and pay off cards with low balances.  Then get everything to 35, 30, etc.
• Don't go above 50% on any card
• Plan for long term score and financial stability, not short term score hikes.

[Anonymous]

Wise, wise advice from Bdhu.

You should forget about your FICO score for the next year or more -- as long as it takes to get all your CC debt paid off.  (Except to the extent that you are always paying every account by at least the minimum payment and before the due date.  Naturally if you didn't do that then it would have long term consequences to your score.)

Right now you are likely paying large amounts of interest to CC companies.  You are also likely saving no money.  Your goal should be to shift your fundamental approach to spending so that, by the time you finally get your CC debt paid off, you have so reoriented your monthly spending that you are now saving a big chunk of your monthly paycheck:

Toward retirement

Toward a rainy day fund

Toward the down payment on a new car or a house

When you get all your CC debt paid off, you can look at your scores again; and when you do, you will discover that they are far higher.

[damac2004]

i know there is allot of different situations out there.  

i went on a spree to pay down all my cards recently and did it in stages over months

it was interesting for me to see that towards the end i didn't gain as many relative points vs. early on when paying each card off.   looking back it sure seems that for credit cards it was the overall amount owed vs. the individual card on my thresholds.

at the end i only got a 3 point gain by paying off a carecredit card and 2 more cards ended up reporting a 0 balance, leaving me with just a small balance on one card.  i was honestly bummed when i saw that

just an example in a few months or so i went from 666 to 757 all from paying off the credit cards.  i have 2 installment loans open that only are a few payments in and it looks like i took an 8 point hit for one of those reporting.

[Thomas_Thumb]

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@damac2004 wrote:

i went on a spree to pay down all my cards recently and did it in stages over months

it was interesting for me to see that towards the end i didn't gain as many relative points vs. early on when paying each card off.   looking back it sure seems that for credit cards it was the overall amount owed vs. the individual card on my thresholds.

just an example in a few months or so i went from 666 to 757 all from paying off the credit cards.  i have 2 installment loans open that only are a few payments in and it looks like i took an 8 point hit for one of those reporting.

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Right on! Aggregate utilization across all cards is a much stronger factor on score than is utilization on a specific card.

[SouthJamaica]

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@team_audi wrote:
Hello, I have some questions about what if scenarios with my credit cards to get the best improvement on my score.

Here is my credit picture. These are my cards

$1,900 out of 3,000 limit
$1,700 out of 2,800 limit
$5,600 out of 10,000 limit
$6,300 out of 10,000 limit
$3,600 out of 5,000 limit
$600 out of 1,800 limit
$800 out of 2,000 limit
$600 out of 3,200 limit

I am questioning what would happen if I balanced transferred to my higher limit cards to reduce my utilization on the other cards to less then 30% or even 10% or under but increase to near 75-80% on one or two cards?

Basically if I paid all my cards down to under 10% and almost maxed out my 10,000 limit card/cards would I see an increase in my scores? Right now I am at 53% I believe overall ultilazation. It seems that the scoring system seems to look at each account and total overall, which one is greater?

My scores are 636 EQ 641 TU 659 EX also note I have a 2 year old BK and past Derogatory late payments from 5 years ago. That's what is keeping my scores down. Overall I want to increase my scores for whatever i am able to by figuring out what to do with my balances. I am paying over 1,000 total a month on all my credit cards as well to pay more then the min.

Any help would be appreciated. Sorry if I posted in the wrong forum.

Matt

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In my opinion what would help your scores the most is to get any accounts which are presently >50% to < 50%.

Since you're already paying a lot of interest, it's probably not a good idea to incur the additional expenses associated with balance transfers.

Once you've got all your accounts under 50%, then get them all under 40%, and so on, until you're under 10% on all your accounts.

[Anonymous]

I think if I was in your situation, my approach would be from a shear money objective. In other words, how can I reduce my bills and use the money to assist paying of my balances.

If I could get a card or a loan with 0 interest for a year, transfer all I could to that card or loan, pay the bill every moth. Using money saved by not paying interest and applying to to the remainer of the balances on cards still having a balance. I would need to also look at the rest of my finances, figuring out how to get these balances paid off. Tackle the cards with the lowest balances, and get them off your plate. Those wins will excellerate you convictions. You will be in Scooge mode before you know it ;-)

Wash and repeat.

Another option is to transfer to your lowest inerest rate card, but yes, you need to look at the cost of doing so.

If none of the above is feasable, focus on lowest balance card, pay it of, get it off the plate, go the the next lowest, on and so forth. Think of it as how can I reduce the amount of my bills. There may be a better money waise way, order of doing it, but you need those wins, to keep the coarse.

A world of options will open up after you get the balances down,