What is the best scenario for FICO score when it comes to util??

[Anonymous]

I am trying to get to 700 - soon.   My current Fico scores are:

TU 658     EQ 647    EX 643

I have 10 open credit cards all with balances.  Small balances but balances still the same.   My total credit line is $7800 - my total balances are $5600.    My total util is  72% - my individual utils range from 61% to 86%.    On my "negative factors" my util is the first one listed.   What is the best strategy score wise?

Thanks!

[marty56]

That answer really varies like the credit scores here.  For me, it is only one CC showing a balance of under 10% of the CC's CL.

Most people here agree that it is below 10%  which just differ on how many cards show a balance.

For me, less is more.

[Anonymous]

Hi ee, the general consensus of opinion here is to have half of your cc's reporting a balance of 1%-9% utils, and the other half reporting a $0 balance.

FICO looks at both individual and combined utils. Amounts owed(read that to mean utilization) accounts for a full 30% of your fico score.

Your utils are hurting your scores majorly badly. I was able to pull my scores up from 521 in Feb.2007 to 681 by July,2007 by ONLY paying down my cc debt.

Getting the utils down is the easiest way, by far to increase your scores.

[Anonymous]

Thanks Sylviatob!  Definitely gives me the right direction.

[Anonymous]

Most welcome.

[sunrise]

ee.....get those cc's paid down to 3% util and do it over a 3 month period!!  That way you should get 3 decent score boosts!!  I did this and got 80 points!! 

My util was at 98%, I paid it down to the 2-3% range over 3 months and each month, I got a great score boost!!

My sis didn't want to wait the 3 months to see her scores boost and paid her cc's from 85% util to 3% util last month with her tax return......and she only got a 25-38 point boost between the cra's.  We both have the same # of cards.  Now, she is at an ideal util. and still needs her scores to go up another 25-40 points!  She is scramblin' to figure out what else to do.

BTW, I did it the 3 month pay-down because the FICO simulator gave me a good boost!  Ideally, it said pay it down over 24 months....but, I only had 4 months before I wanted to pre-qualify for a mtg!

You mentioned "soon" in your need for scores to go up...if you don't have 3 months, try 2 months. Any way you do it, you will get a boost....just the longer period you take to pay...the higher the scores are supposed to go up according to the FICO simulator!!

Good Luck!!

[Anonymous]

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sunrise wrote:

You mentioned "soon" in your need for scores to go up...if you don't have 3 months, try 2 months. Any way you do it, you will get a boost....just the longer period you take to pay...the higher the scores are supposed to go up according to the FICO simulator!!

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This is because the FICO simulator also takes into account the aging of your accounts when it projects your estimated score.  The points you get for utilization wil be the same whether you pay your balances down immediately or over a period of time.  As your accounts age, your score will naturally trend upwards over time, so all else equal, you'll see a larger overall point gain.

In the case of what happened to you and your sister, you didn't get more points just because you paid your balances down over three months.  Something else was going on there to account for the difference between the points you got and those your sister got for the same action.

Two different reports will almost always react somewhat differently to the same action.  Without looking at both of your reports in detail, there are so many variables involved it's impossible to say why you got more points than she did for paying your balances down.

[Anonymous]

High utilization can and usually will tank your FICO score.

As someone already pointed out, the score simulator gives you more props for reducing your balances over time because of the elapsed time. If you have any dings on your CR, time is your ally. If you can get your utilization below 10% tomorrow, do so. Wait for the utilization on your CR on all lines of credit to update, then pull another CR and re-run the simulator. You'll still get props for elapsed time.

[granny031350]

so slow is better?  I had to take my utilization up in Feb/March due to a move.  I have been panic stricken about my higher utilization.  But I am not going anywhere for a while nor do I need to apply for anything more for a while either. (although I want to badly but will resist until I can actually apply for a prime card.  That is my next goal)  So over the next 3/4 months, I can definitely get it down to the less than 10 percent goal.  (right now about 90 percent) 

[haulingthescoreup]

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@granny031350 wrote:

so slow is better? I had to take my utilization up in Feb/March due to a move. I have been panic stricken about my higher utilization. But I am not going anywhere for a while nor do I need to apply for anything more for a while either. (although I want to badly but will resist until I can actually apply for a prime card. That is my next goal) So over the next 3/4 months, I can definitely get it down to the less than 10 percent goal. (right now about 90 percent)

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No, slow isn't better. Pay it all now and wait six months, or pay it down over six months --if nothing else changes, you should have the same scores in the end.

Where people see differences are generally when one started several months ago, paying down over time, and another person paid all at once, but hasn't had the extra months to cook.

I whumped my util down fast and hard and then hunkered down, and I got great results.


edit: whoops, saw that you're at 90% now. I was speaking generally, not specifically to your situation. But you don't need to drag out your paydown according to what the sim says. Both for credit and financial reasons, the best tactic is to pay down as fast as your budget can stand it.

Message Edited by haulingthescoreup on 03-10-2008 05:38 PM