I got a question that would affect my balance transfer strategies.. Basically, I was wondering if anyone has an experience of the criteria used for evaluating the credit score when a certain balance shows on some credit cards. So, for example, if I have a $10,000 debt, would it make a difference having it all on one card and thus have a large balance/CL ratio on this account while having all other credit cards with zero balance, or would it be â??muchâ? better dividing the balance on 3 or 4 different cards and thus having a smaller utilization ratio for each individual account. My total cumulative available credit line is about $80k. Thanks
Your best bet is to keep it moving, transitioning between cards constantly, timed right, you can masquerade your debt ratio's due to the lag involved in reporting with some creditors.
we've had this discussion before... there is a code "too many balances on too many cards" that will kick in if a lot of cards have active balances. leaving the conclusion that fewer cards with balances are better. Of course, the total revolving ratios are key drivers for the score. If you can move the revolving balances to installment loans you'll actually get the biggest score bang for the move. If you can't, then move it to the best rate cards and pay them down in full one at a time until done and that'll give you a better score
Sam.. I think this is pretty hard to coordinate.. You may actually end up with balances shown in the new account before being shown that they have already been paid off in the original account. This would hurt my score. I am trying to pay off the debt but that may take a year or so.. Currently I have a good offer from Amex Blue with 5.9% till paid. So that's why I have everything on that card. But, it might be worse for my score than having the money divided on 4 cards, especially that I would be applying to refinance my mortgage pretty soon.
Marie, Thanks for the suggestion. So based on what you said, the "total" revolving ratio is what matters for the score. So I would be better, or at least not worse, by leaving the balance on just one card.
better on just one card. that way you won't also trigger the "too many balances on revolving cards" hit as well. 5.9 is a good rate. you'll pay that off quickly. smart move.
I have two 0.00% cards...WHO IN THEIR RIGHT MIND WOULDN'T MAX THEM OUT??? ...but those two MAXED is a very low percentage against the total credit limit.
It doesn't matter a whole lot...F.I.C.O. is a FIXED system...my favorite denial reason is...EXCESSIVE CREDIT LIMITS!!!
Alex, You're on the right track! I have all of my CC balance on one card and plan to keep it there, regardless of what FICO says about utilization - b/c it saves me the most money in the long run and gets me out of debt more quickly...
George, What do you mean exactly be "FIXED" system In my case, my total credit limit on a total of 9 prime cards is about $90k.. I am using about $10k out of these which is about 11%.. This is if the TOTAL is what counts. I was just thinking that my score may be pushed lower due to having a single card with about 70% utilization while the others are empty.. but may be not.. As you said, who wouldn't max out a 0% !!
Marci, I completely agree with you.. I am paying off my debt and having the lowest interest available is what counts.. I had some lower interest offers for limited periods but I decided to stick with the one I have since it's available till the balance is paid in full.. I don't really care about the FICO crab except that I am applying for refinancing soon and wanted to be in a good position.. My current score is 670.. Thanks
Any time you reach 50% of any cards limit, your score will be affected. At some point though you have to be willing to sacrifice a few fico points for a 0% intro rate. I have two citi cards with o% til August. My scores went down about 10 points, but I'm living interest free til the end of the summer.
I have a PERFECT payment history since 1978 with NO benefits. I paid $30,000 OFF in one month and LOST POINTS!!! When I made <$35,000/year...I had almost $200,000 of unsecurred credit cards... IT'S FIXED BECAUSE IF YOU PAY OFF YOUR ACCOUNTS, YOU LOSE POINTS... YOU GET NEW CARDS, YOU LOSE POINTS... YOU CLOSE ACCOUNTS, YOU LOSE POINTS... YOU CAN'T WIN!!!
Alex, 5.9% for life is a heck of a rate. If you get some 0% offers for 6 months or so, I'd transfer a small sum to cards like that but, I'd make sure it was something I couls pay off when the teaser rate expired. AMEX wouldn't be able to blast me out of a 5.9% for life until I paid it off! Forget about FICO-get out of cc debt as cheaply as possible.
Keepmine.. That's exactly what I am doing.. I transferred a small amount to Chase Gold Visa as they offered 3.9% for 6 months with no BT fees.. I plan to pay it off before the teaser period expires.. I got an offer from Chase Shell card for 1.9% on BT >$5000 combind with a 2% fee (max $35.00) till August.. However, the fee, and having to transfer more than $5000 made the offer not worthy to me when compared the 5.9% I have for life with Blue.. George.. What do you have the 4.75% on from BoA? Is it a credit card or a LOC? I have a platinum Visa with BoA but never received a BT offer from them..
You should call them and ask for the offer. I have it too, but I had to call to get it. Alot of people on this board have that bt offer from BofA.
***WARNING*** If you use the card for purchases, or you have a 8.90% BT on it...YOU MUST PAY IT OFF FIRST...
Thanks .. I will call to check the offer.. My card has a zero balance.. I don't use it for anything..
