Preparing to drop my utilization and boost my score but first a question...

[Anonymous]

On average my utilization is about 89% with around $62K in CC debt. I still have student loans, two leases, a personal loan, and a mortgage. I'm really struggling each month. But I'm lucky enough to be in a start up that's about to pay out some employee options and will have about $30K after taxes that my spouse and I want to split and reduce our debts so we can finally get ahead.

My current vantage is like 618 and my FICO is 660's.

I made a spreadsheet and put my balances in, utilization percentage, and goal but now I'm wondering. Is it better to pay off two or three cards and leave some of my larger cards with a higher utilization to create a better average utilization OR spread the money more evenly across all the cards to bring them down to a slightly higher average.

Secondly, I've had a card in the past (USAA) which I've had for like 20 years and was maxed out and then paid off, they slashed my credit line in half. Are some banks worse about this than others? Should I make one big payment to each or spread out $500-$1000 / month over a couple months to prevent this?

Thanks!

[SouthJamaica]

---

@Anonymous wrote:

On average my utilization is about 89% with around $62K in CC debt. I still have student loans, two leases, a personal loan, and a mortgage. I'm really struggling each month. But I'm lucky enough to be in a start up that's about to pay out some employee options and will have about $30K after taxes that my spouse and I want to split and reduce our debts so we can finally get ahead.

My current vantage is like 618 and my FICO is 660's.

I made a spreadsheet and put my balances in, utilization percentage, and goal but now I'm wondering. Is it better to pay off two or three cards and leave some of my larger cards with a higher utilization to create a better average utilization OR spread the money more evenly across all the cards to bring them down to a slightly higher average.

Secondly, I've had a card in the past (USAA) which I've had for like 20 years and was maxed out and then paid off, they slashed my credit line in half. Are some banks worse about this than others? Should I make one big payment to each or spread out $500-$1000 / month over a couple months to prevent this?

Thanks!

---

1. It's best to get them down proportionally across the board. Keep paying as much as you can, as fast as you can. Keep shooting for thresholds, such as 78%, 68%, 58%, etc., until you get down to nothing being over 28%.  Then you can start zeroing out accounts. 15k should be enough to get you across a threshold or two.

2. That dastardly practice you referred to is called balance chasing. Don't worry about which lenders might start balance chasing.  You can't really know. Yes some are more likely than others, but whether you pay it slow or fast isn't going to make the bad guys good or vice versa. So just stick with the program.

[Anonymous]

---

@Anonymous wrote:

On average my utilization is about 89% with around $62K in CC debt. I still have student loans, two leases, a personal loan, and a mortgage. I'm really struggling each month. But I'm lucky enough to be in a start up that's about to pay out some employee options and will have about $30K after taxes that my spouse and I want to split and reduce our debts so we can finally get ahead.

My current vantage is like 618 and my FICO is 660's.

I made a spreadsheet and put my balances in, utilization percentage, and goal but now I'm wondering. Is it better to pay off two or three cards and leave some of my larger cards with a higher utilization to create a better average utilization OR spread the money more evenly across all the cards to bring them down to a slightly higher average.

Secondly, I've had a card in the past (USAA) which I've had for like 20 years and was maxed out and then paid off, they slashed my credit line in half. Are some banks worse about this than others? Should I make one big payment to each or spread out $500-$1000 / month over a couple months to prevent this?

Thanks!

---

The manner in which you pay off cards doesn't matter too much in respect to general credit improvement. I would personally pay off the cards with the highest interest rate first. There are also many people who find that paying off the cards with the smallest balances motivates them to continue paying off debt. Likewise, paying all cards down to similar utilizations is a perfectly acceptable strategy. It really comes down to personal preference and if one payoff method motivates you more then go for that method.

Adverse action is very frustrating when you are paying down high balances and there isn't a good way to predict if it will happen or which financial institution will take AA. If you find a bank starts lowering credit limits as you pay cards off and you want to maintain your limits, I would recommend putting all cards issued by that bank on the back burner and only make minimum payments. You can then focus on your other cards that aren't actively having their limits cuts and once your scores improve the bank that initially took AA will be less likely to do so once you start paying down their cards with your now higher scores.

[Anonymous]

Thanks for the replies! I've made my first round of payments today. Target of 78% on most and lower on some others.

How many monthly cycles would you go after paying down (and continuing to make payments) before attempting any type of CLI? Some of these cards have been above 85% for awhile but I've made at least the minimum or more for regular payments. My assumption is that even if my utilization fell below 20% on a card that's been previously maxed out for months the bank isn't just going to increase it, even with a HP. My guess is 3-6+ months.

[SouthJamaica]

---

@Anonymous wrote:

Thanks for the replies! I've made my first round of payments today. Target of 78% on most and lower on some others.

How many monthly cycles would you go after paying down (and continuing to make payments) before attempting any type of CLI? Some of these cards have been above 85% for awhile but I've made at least the minimum or more for regular payments. My assumption is that even if my utilization fell below 20% on a card that's been previously maxed out for months the bank isn't just going to increase it, even with a HP. My guess is 3-6+ months.

---

If they're soft pull, whenever you feel like it.

If hard pull I'd wait until everything's below 30%.