Need score help again.

[Anonymous]

Long story shot (hopefully).  I have a card with about an $1800 balance that was defered payment/defered interest for one year as long as it was paid before that year was up which is January 1st.  Obviously I want to either pay it off or transfer the balances before that interest is added on.  Which of the followign scenarios would cause me the smallest hit to my score if I was not able to pay off the amount.

-Transfer the entier balance to one card that already has a balnce puching the usage from 37% to 80%

-Tranfer the balance to one card currently with a 0 balance ending with a 72% utilization

-Tranfer to two cards with 0 balances but keep the utilization on each under 36%

-transfer 1/2 to first card with balance (59% utilization from 37%) and 1/2 to 0 balance card 36% utilization.

I do have the cash on hand to pay it off, but am looking to buy a house and may need the reserves to qualify for the loan.

[GFer]

Depends on how many cards you have total and of course the utilization on the one card in particular. Obviously, lower util is better.  And the reason I say this is because you typically will be hurt less when you carry balances on less than half of your cards.

But all that aside, if you are doing this to save money and don't really plan on applying for credit for awhile (especially big ticket items like mortgage or vehicle) then it doesn't matter.

[RobertEG]

JR most depends upon your emphasis on doing this for FICO or for financial purposes.

If not intending to app' for new credit in the near future, ignore FICO impact and go for what will cost you the least out of pocket.  Importantly, any BT that you do will cost you, on average, 3% of the amt.  That is instant money out of pocket.

But if FICO is important, some views on CC balance shifting.  Clearly, shifting between existing cards has no affect upon  your overall %util.  But indiv card util also counts, at about the same level, when combined, as overall.  FICO likes at least half of the cards with no balances, and then scores the %util on each card.  It is not easy, because the precise algorithm is not known. 

Unless FICO is an IMMEDIATE concern, then I would focus on the financial.

Constant balance transfers are an instant 3% hit.

Message Edited by RobertEG on 11-04-2008 10:27 PM

[Junejer]

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JR2475 wrote:

Long story shot (hopefully).  I have a card with about an $1800 balance that was defered payment/defered interest for one year as long as it was paid before that year was up which is January 1st.  Obviously I want to either pay it off or transfer the balances before that interest is added on.  Which of the followign scenarios would cause me the smallest hit to my score if I was not able to pay off the amount.

-Transfer the entier balance to one card that already has a balnce puching the usage from 37% to 80%

-Tranfer the balance to one card currently with a 0 balance ending with a 72% utilization

-Tranfer to two cards with 0 balances but keep the utilization on each under 36%

-transfer 1/2 to first card with balance (59% utilization from 37%) and 1/2 to 0 balance card 36% utilization.

I do have the cash on hand to pay it off, but am looking to buy a house and may need the reserves to qualify for the loan.

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When are you looking to purchase the house? How quickly can you then pay off the balances?

[Anonymous]

Some info I forgot to include yesterday.  This defered payment card does not currently show on any of my credit reports.  Not sure why, but it may have to do with there being no activity since it was defered payment/defered interest.

I am hoping to get in to a house before the first of the year which would be great because then It wouldn't matter how I moved stuff around once the home loan is funded.  I do have an offer submited right now that looks very promising as there are no other offers currently on the property.

To answer some other questions I currently have 9 active cards including this one.  3 of which have balances (including this one).  I also have some great balance transfer offers at low interest rates with no additional fees but that would mean splitting this up to possibly as many as 3 cards although I could put it on 2 but have a higher usage on those cards.  Any balance that is transfered can be paid off in anywhere from 1-4 months depending on how much I need out of pocket for this house if my offer is accepted.

So wish me a little luck and/or say a little prayer for me that I can get in to this house before the 1st of the year.  If not, I have about 10 points to play with to keep my mid score above 680 for the best result, but from what my LO says I should be able to drop as far as 620 and be fine but may have to come up with a little more out of pocket.

[Anonymous]

Quick update for those of you kind enough to help me on this.  I am now under contract and am set to close by 12/22 so it looks like I won't have to worry about this after all.  Once the loan is funded I have a 0% interest balance transfer offer I can use to dump this other card before the interest kicks in .  If everything goes as planned it will be paid off by April of next year.