Need a 16 point score boost.....any suggestions????

[Anonymous]

Question: I applied for a mortgage yesterday at 5% because of my 646 credit score, and would like to get it to 660 so that I can qualify for a cheaper rate. I have two CCs: one with a $400 limit that has about a $236 balance and a $1500 limit with a $1286 balance. If I were to pay off one ( the $236) or pay down the other( to say $750), would I get the boost that i need? Or should I just use the money towards my closing costs?

Any advice would be appreciated :-)

[Anonymous]

There is absolutely no way to tell you what the FICO gain would be.

However, if you want it improved you need to try reporting a balance only to 1 account and get all CC debt to 9% or less of your combined CL's, which means you would have to pay off all but $171 in CC's to get the most gains for utilization.  Can you pay almost $1400 toward cc's?

If not, then pay the $236 balance off, then pay down as much as possible the other.  Try to get to under 35% utilization, another higher level thresh hold.

[RobertEG]

My suggestion it to pay one card in full, ASAP.  And the lower balance card is the obvious choice.

FICO scores CC util about equally in overall % util and individual card % util, per statements by FaIir Isaac in their credit webinars.  And percent of cards reporting blances is also scored.

So whatever you pay, it will clearly have the same effect in overall % util.  So, where to put the $$?

Paying one of the two cards down to zero balance will put 0% util on that card, and also show only 50% of your cards reporting balances.  Pay the $236 balance card first, then any remaining payment that you can afford into the other card.  That should give you maximum FICO gain.