I know the optimum goal for cc pay-off to bump up credit score is below 35% ...isn't that correct? But, at least you should get to 50%. Does anyone know the difference in score bumpage?? Roughly, of course. I know this is top secret loced away info. Thank you.
I am not sure it makes much difference whether you have 50% on one card or the same amount spread across 2 cards, each with lower %. I generally look at the overall debt to available credit ratio and keep that low, putting the debt where the terms are best. The purpose of good credit is to get the best terms. The purpose of getting the best terms is to maximize my own bottom line. It therefore does not pay to have good terms, but still use higher rates if you don't have to. I also keep all accounts below 80% (or actually at most only one anywhere near there), regardless of terms, to ensure no possibility of accidentially tripping an over limit that might trigger a default rate from that account or any other. I figure the CL for an account is what the creditor feels comfortable for me to carry, given only moderate use elsewhere, and I don't push them to want to drop that limit since it tends to cause other creditors to react similarly.
In addition to the great answer Ontrack gave, for myself, my debt was through the roof, and I needed a new car. It hurt, but I paid off 3 cards, and was disappointed to see I only got 22 points. I'd paid off Amex and a local jewelry store card. Being sneaky, I then paid off another card down to about half, and only gained 4 points! Your mileage may vary , and everyone's reports are different - but yeah, at the end of the day, getting rid of all debt is the key!
I believe a lot of the amount of effect that debt to credit limit ratio has depends on length of credit history, and age of accounts. If you have a long history with no negatives, you are likely to have less effect from higher debt levels than if you have a short history.
In case you all are still checking out this thread... a long history is about how long in years? 5, 10? I know the ones I am referring to are shorter history...roughly two years. And thanks as always for your replies.
I've heard (this was awhile back), that 5 years is in the gate waitin to go, 8-10 is a good running start, and 10+ is gold/finish line. I think it depends on so many things on your report, cause I know people that only have 2 - 3 years of history, and have scores in the middle 700's....but my uncle has almost 22 years of history, and his scores are....well.....ending post here
Myfico.com states that 35% of your score is based on utilization. I believe that keeping the util. below 20% will improve your scores dramatically.
if your only objective is to raise your score no matter what the cost, and if you have daily access to your scores, you can experiment with transferring balances back and forth. figure out when each company reports first(which is usually shortly after your statement date), and when you know when they report, move the debt around to your best benefit. some cc companies only allow you to do so many balance transfers, so use this sparingly. this works best for trying to get a good rate on a mortgage. i did that last month and increased my score by about 35 points on average.
