# of Accts with Balances vs Debt-to-Limit

[Anonymous]

Hi all,

My credit score shows as being negatively impacted by a couple things:

1) Too many accounts with balances; and

2) Balances too high

I have 6 credit card accounts, all with balances, all with debt-to-limits around 25%.

I would like to improve my credit score, and I'm unsure if it would be better to either:

1) Pay the balance on a given card or two all the way to zero, while others remain at 25% utilization; or

2) Pay all cards down to a new utilizaiton threshold, say, less than 10% utilization.

Any insights would be helpful. I think option 2 is the best way to go to get the score up, but I am unsure how meaningful the "number of accounts with balances" factor really is.

Thanks.

[blindambition]

You will definitely see increase if all report under 8.9%, but additional points should be gained when less than 50% of cards are reporting balances.

[AZ-Jeff]

If it were me, I would focus on paying down the credit cards with the highest interest rates. The interest rate you pay doesn't affect your score, but does affect your finances. Just my .02

[Anonymous]

Thanks for the input, I appreciate it.

[SouthJamaica]

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@Anonymous wrote:

Hi all,

My credit score shows as being negatively impacted by a couple things:

1) Too many accounts with balances; and

2) Balances too high

I have 6 credit card accounts, all with balances, all with debt-to-limits around 25%.

I would like to improve my credit score, and I'm unsure if it would be better to either:

1) Pay the balance on a given card or two all the way to zero, while others remain at 25% utilization; or

2) Pay all cards down to a new utilizaiton threshold, say, less than 10% utilization.

Any insights would be helpful. I think option 2 is the best way to go to get the score up, but I am unsure how meaningful the "number of accounts with balances" factor really is.

Thanks.

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Once you have all accounts at 28% or less, you should then concentrate on zeroing out the lower balance accounts.

[Anonymous]

Generally people choose finance over Fico, meaning paying off the higher interest debt first and work down from there. If your only goal is to improve scores, obviously paying them down as low as possible would be a good start. I don't know what formula is used for too many cards with a balance, though out of six I'd say only having two report with balances might eliminate that reason code. 

I generally don't have more than 4 cards with balances at any given time of an app, and they very rarely over 20%. I've not seen that reason for a denial.

[Anonymous]

OP, you didn't happen to mention dollars in your original post, just utilization percentages.  As we all know, not all revolvers are created equal.  25% utilization could be less than $100 on a tiny limit card, where it could be $2500+ on a $10k+ card.  Without knowing your individual balances/limits it's difficult to offer advice.