@codefreak13wrote:
I'll be at a point soon where my credit looks like this:
48.9% overal util
auto loan - 15% util
8 revolving cards
4 of those cards w/ 0 balance
Card 1 - 3k, 88% util
Card 2 - 4k, 88% util
Card 3 - 2.6k, 88% util
Card 4 - 1.6k, 56% util
all cards w/balances are identical APR
AAoA: 3 yr 2 mos
This is purely academic because it will all be paid down within the next 16 months or so, and I will not be applying for anything new in that time frame. I just wanted opinions on what paydown factor would give the best short term score bump over the next $1600 in paydown:
1) Paying down Card 4 to $0 so that #of accounts with a balance moves from 5/9 down to 4/9 (or counting just revolving accounts, 4/8 down to 3/8)
or
2) Paying Cards 1-3 down below the 68.9 individual util threshold
The scoring bonus for getting all cards at < 69% (#2) will likely be greater than the bonus for having one extra card with a $0 balance (#1).
Creating a lot of open accounts with a zero balance gives you help on some models, but lately people have been expressing skepticism that it gives you much help with FICO 8 Classic.
Great to see you write:
This is purely academic because it will all be paid down within the next 16 months or so, and I will not be applying for anything new in that time frame.
Yup. Once you know that, you correctly infer that how fast your scores go up depending on the paydown strategy you use doesn't matter. Eventually you will arrive at the same place.
Because of this, many people choose a paydown strategy that will help them pay down their debt the fastest. (Score doesn't matter.) Some people choose the Snowball method because it gives them a strong emotional high (sense of accomplishment) each time they create a new zero balance -- and that cannot be overrated in achieving financial goals. If you feel like you don't need that kind of consistent emotional reinforcement, then the purely mathematical choice is to attack the cards with the highest interest first.
Regardless I think you should pay at least double the minimum payment on every card. Cards with high util where the user only pays the MP is a high-risk behavior and it can make some issuers nervous.
