Utilization and CLIs

[Anonymous]

My husband and I got a CLI on our BoA card- from 6800 to 10000.  When it reported the other day, I got a 12 point jump, and he got a 15 point jump.

Individual util. on that card went from 90.12% to 61.28%, and overall util. went from 53.06% to 49.79%.  We have one other card- Discover- that is nearly maxed out (but not for long; the tax refund just came in).

It will be interesting to see what happens in the next few weeks- I'm paying down the BoA because they're offering 0% BTs, and then I will use that to clean off the Disc.- the highest interest card.  That should bring almost all the cards near or well below 50% util, and my overall util down into the low 40%s...

Maybe, it will even motivate Discover to give me another CLI, to match all my other majors...

-MsMS

[haulingthescoreup]

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@Anonymous wrote:

Maybe, it will even motivate Discover to give me another CLI, to match all my other majors...

-MsMS

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It worked with DH's Discover! He was cheerfully paying some obscenely high APR on a balance on Discover when I convinced him to get a BofA and do a BT. After the Discover sat unused for about 6 months, he called back, and they gave him a semi-temporary APR of 3% and a CLI. Not a big one, but any CLI from Discovery is a small victory.

When I thought about it, I'll bet Discover rate-jacked him when the bogus medical collection hit, and he never even knew it.

[Anonymous]

Cool- nice to know they do that!

I plan to still run most of my purchases through them, but now I'll be PIFing.

I asked Discover for a CLI a few months back, and got one- very shortly after, BoA gave me a surprise CLI to just over what Discover gave me.  I'm hoping Discover is as competitive as BoA!  Right now, Amex, BoA, and USAA are all 10k credit limits... 

My short to mid-term goals are to get the util. down enough to raise our scores enough to get a decent rate when we refinance the truck loan with USAA- then I'll ask USAA for an APR reduction on the Mastercard.  I'm at 681 now, and later this month will see 2 accounts and their respective inquiries (Amex and the HELOC) turn one year old.  I can't be absolutely sure that the score bump wasn't partially because of that, but given that the SW update/alert was for BoA, and it affected both me (longer, thicker file, the new accounts not so bad) and my husband (short history, thin file, new accounts hit him hard) about the same, I figure it was probably the util change...

-MsMS

[RobertEG]

Good work, MsMS, you are playing both the financial and FICO game.

I have only one question... when are you planning to need your FICO score for the refinancing?  If not within the next six months, then maybe using your new BoA credit limit and doing a BT with them to pay off the Discover might be wise.  Since you are still at 61% on BoA, doing a BT from them to Discover will drive %util on that card back up. 

I have my prejudices, for I am not a big fan of BTs unless it is for longer term (6 month or more) financial planning reasons, and not for immediate FICO reasons.  A BT does not improve your overall %util, and usually costs you an instant 3% BT fee (not an annual fee), which, if you take it to the extreme, to make my point, would be a 36% interest charge if you did one every month for a year.  One card goes down in %util, the other goes up, with no change in overall %util, and 3% out of pocket, gone forever.  It is the longer term, low interest that is offered by the BT that is financially sound, so a longer term tool, and not of immediate benefit FICO or financial benefit.

Those CCCs dont offer all these instant checks and great BT offers because they are trying to benefit the consumers, and not themselves.Some can benefit with smart planning, but on the whole, most lose.

[Anonymous]

That's pretty much my plan...

Before tax refund payment/extra paycheck and BT (I get paid biweekly, so May & Nov. I get 3 paychecks):

BoA= 6188.74 @ 7.9%  Util 61.89%

Disc.= 3551.48 @11.9%  Util. 54.64%

After:

BoA= 1804.68 @ 7.9% and 3658.02 @ 0%    Util at 53.56%

Disc= PIF.

Yeah, I know I'll be taking a bit of an interest hit by adding a 0% BT to the not-completely-paid-off BoA (as compared to paying it off completely before doing the BT), but it should still be financially better than it is now.  I'll still be using the BoA, so leaving a bit of a balance won't hurt that much more anyway.

We are thinking about refinancing the truck in the next 6 months, but that's part of why I'm planning it this way- reduce both util. and interest at the same time.  More money not paying interest= faster CC paydown= better scores...

-MsMS

Message Edited by MsMS on 05-06-2008 06:33 AM