cancel
Showing results for 
Search instead for 
Did you mean: 

would a drop from 87% total utilization to 50% net good points?

tag
Anonymous
Not applicable

would a drop from 87% total utilization to 50% net good points?

I've got a bunch of low limit CC's that always report at or sometimes even above the limit.   Currently I'm at 87% utilization and am curious if one could expect a fair amount of points by getting all of them under 50% or if it would be better to pay a couple completely off and leave a couple above 50% until I can get them paid down as well?

Message 1 of 16
15 REPLIES 15
haulingthescoreup
Moderator Emerita

Re: would a drop from 87% total utilization to 50% net good points?

That's something that you can probably only find out by experimentation. Smiley Tongue

 

What are the dings on your FICO reports? (screen 2, on the left) I'm sure from what you wrote that you're hit for high util, but do you also get a ding for "too many accounts with balances"?

 

Practically speaking, since these are low-limit cards, I think I'd try to kill off as many as possible and then work on bringing the others down. If you have the money to do this, I would think that you'd get more bang for your buck, especially in terms of momentum. It can really be motivating to see a bunch of cards suddenly start reporting $0.

 

But if you don't need the emotional jump-start, you could instead pay off the highest-APR card first, then the next highest, and so on.

 

I'm just not sure that you'd see a lot of results in terms of scoring by inching them all down, a bit at a time.

 

Are you specifically trying to hit a certain score by a certain time for a specific purpose (mortgage app, for instance), or is this more of a case of roll up your sleeves and tackle your debt?

* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit?
FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007
Message 2 of 16
Anonymous
Not applicable

Re: would a drop from 87% total utilization to 50% net good points?

I'm trying to maximize points to apply for a mortgage.   I have older derogs but totally clean since May 09 so I think the high utilzation is really hurting.   Luckily it isn't a huge amount but not so small that I can take care of it all immediately.

Message 3 of 16
haulingthescoreup
Moderator Emerita

Re: would a drop from 87% total utilization to 50% net good points?

What's your timeline for apping?

* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit?
FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007
Message 4 of 16
haulingthescoreup
Moderator Emerita

Re: would a drop from 87% total utilization to 50% net good points?

--I'm probably going to cause us to start crossing posts, and I apologize if that happens, but I think that in your situation, I'd do this:

 

pay off as many CC's as you can, right off the bat. That means that you'll pay off the smallest absolute balances first. Each individual CC might have high or low util, but you're looking to spread your available cash over the maximum number of accounts.

 

This tactic will reduce your total util by the same amount as if you lowered all the cards equally, plus you'll get some benefit by having fewer cards with balances.

 

After that, your next move will depend on your available cash in the future and what's remaining. If there are only a few cards left with balances, your choice will be whether to target the highest APR first, OR the lowest remaining balance first, OR the highest individual util first, OR get them all under 50%. The lower the better, of course.

 

Your decision at that point will depend on what you have left on how many CC's, how many are super-high util, how fast it will take to knock off one at a time, and so forth.

 

And since you're going for a mortgage, remember than an equally important goal is to have a chunk of cash in savings. Owning a home means lying in bed at night, listening to a brand-new funny noise, and wondering how much it will cost to fix whatever has happened this time. Smiley Tongue

 

Good luck!

* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit?
FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007
Message 5 of 16
llecs
Moderator Emeritus

Re: would a drop from 87% total utilization to 50% net good points?

Here's my example of going from 89% to 3%. On EQ, I did a big crossover past 50% but you can get a general idea on TU:

 

http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Score-impact-of-going-from-89-util-to-lt-...

 

Message 6 of 16
Anonymous
Not applicable

Re: would a drop from 87% total utilization to 50% net good points?

I am trying to get a home loan and paid my credit card down to 9% last week.  The lender checked to see how it will help my scores and though it's not set in stone it looks like my EX and TU scores will inscrease around 40 points and my EQ score 50 points

Message 7 of 16
sugarmagnolia23
Valued Member

Re: would a drop from 87% total utilization to 50% net good points?

llecs- thanks so much for posting your thread here, I have read so much on here about this but had never seen such a detailed example- what a great read. Very inspirational!

"Those who danced were thought to be quite insane by those who could not hear the music" Angela Monet
Message 8 of 16
Anonymous
Not applicable

Re: would a drop from 87% total utilization to 50% net good points?


@haulingthescoreup wrote:

--I'm probably going to cause us to start crossing posts, and I apologize if that happens, but I think that in your situation, I'd do this:

 

pay off as many CC's as you can, right off the bat. That means that you'll pay off the smallest absolute balances first. Each individual CC might have high or low util, but you're looking to spread your available cash over the maximum number of accounts.

 

This tactic will reduce your total util by the same amount as if you lowered all the cards equally, plus you'll get some benefit by having fewer cards with balances.

 

After that, your next move will depend on your available cash in the future and what's remaining. If there are only a few cards left with balances, your choice will be whether to target the highest APR first, OR the lowest remaining balance first, OR the highest individual util first, OR get them all under 50%. The lower the better, of course.

 

Your decision at that point will depend on what you have left on how many CC's, how many are super-high util, how fast it will take to knock off one at a time, and so forth.

 

And since you're going for a mortgage, remember than an equally important goal is to have a chunk of cash in savings. Owning a home means lying in bed at night, listening to a brand-new funny noise, and wondering how much it will cost to fix whatever has happened this time. Smiley Tongue

 

Good luck!


If OP's goal is to get the highest score possible, it seems logical that the lowest possible individual trade line utilization is that he/she is looking for.

 

Assuming that's the case, it makes sense to make each dollar of payment -- beyond the minimum payments for each card -- to the lowest credit limit card. One of the benefits of this, is that it reduces the risk of one or more CCCs balance chasing his/her credit limits on one of the larger credit limit cards if he/she directed payments to one of those cards. If small limit cards balance chase him, it should have less impact on utilization compared to larger limit cards.

 

OP might not make any score gains if CCCs cut his limits.

Message 9 of 16
Booner72
Senior Contributor

Re: would a drop from 87% total utilization to 50% net good points?

Yeah llecs - that's a great post!  How did you pay for all of those score pulls anyway?  Well, I guess you paid them, but gee wiz!  Good info.

STARTING: 11/24/10 EQ-584 EXP-648 TU04-595
CLOSED FIRST HOME 8/19/11 EQ-630 EXP-691 TU04-653
CURRENT: EQ-701 EXP-??? TU08-720
Message 10 of 16
Advertiser Disclosure: The offers that appear on this site are from third party advertisers from whom FICO receives compensation.