Two revolving credit lines - which to pay on first?

[Anonymous]

I have two revolving credit lines, one with a $4000 balance which is about 63% of credit limit, and the other which has a $700 balance, which is at 25% of credit limit.

I have $700 to either pay the one completely off, or to put towards the $4000 balance.

What move would be best score-wise?  Is the utlization judged per account, or as a total of all accounts?  I have five revolving tradelines, with four of them under 30 percent utilization, then the 4000 one at 63% utilization.

Just don't know what to concentrate on first, paying of the low hanging fruit one by one or tackle the big one.

Thanks!

[MarineVietVet]

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@Anonymous wrote:

I have two revolving credit lines, one with a $4000 balance which is about 63% of credit limit, and the other which has a $700 balance, which is at 25% of credit limit.

I have $700 to either pay the one completely off, or to put towards the $4000 balance.

What move would be best score-wise?  Is the utlization judged per account, or as a total of all accounts?  I have five revolving tradelines, with four of them under 30 percent utilization, then the 4000 one at 63% utilization.

Just don't know what to concentrate on first, paying of the low hanging fruit one by one or tackle the big one.

Thanks!

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Welcome to the forums.

You will get lots of different opinions about this. Only you can make the final decision.

FICO looks at overall utilization as well as each account. If it were me I'd put the entire $700 towards the $4000 balance to bring the util on that card to about 52%. The util on the other accounts aren't terribly high but continue to work on those balances to reduce them as quickly as possible.

Optimal credit utilization for FICO scoring purposes seems to be:

Total revolving utilization > 0 and < 9%, the lower the better, and
Reporting a balance on less than half of your revolving TL's, and
Reporting a balance on half or less of all TL's.

Good luck to you.

(myfico)
7/09 TU-742 EQ- 779
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CC interest free as of 8/09
Time can heal all wounds and a low FICO.
"Hello my name is Sandy and I'm a recovering crediholic".

[marty56]

Score wise, it could be a toss but I would PIF the $700 balance then attack the other with full force.  The is the so-called debt snowball approach that Dave ramsey and most DMP companies use.

[Lel]

Since your utilization is still going to be high regardless of which account you pay, the $700 may not have that great of an impact on your scores.

If a score increase isn't immediately necessary (i.e. you're not seeking new credit anytime soon), then I would suggest paying off/down the account that has the highest interest rate.  This will save you more money, which you could then devote to paying off your revolving balances gradually over time, which would increase your scores.  You should look at all your revolving tradelines for the highest interest rate, not just the two that you mentioned.

[Anonymous]

Thanks for all the quick advice!  My goal is to raise my credit score as quick as possible, as want to buy a house before the extended tax credit expires in June.

I'll have about 700 to 1000 per month for next three months to pay down debt with.

Sorry didn't give you this additional info in first blast.

Paul