What would improve credit score more?

Discussion in 'Credit Talk' started by Alodar, Feb 9, 2009.

  1. Alodar

    Alodar New Member

    I have several credit cards with existing balances that I am working on paying down. Currently, my credit score is ~725. Normally, I would pay down my credit cards, highest interest rate first. However, I have at least one card that is at about 75% utilization ($4500 bal of $6000 credit line).

    Would I be better off to start paying on that one and get the utilization down, or isn't that really critical?

    I can provide more details if they are needed.

    Thank you!!!
  2. cap1sucks

    cap1sucks Well-Known Member

    I think getting that utilization down would be the most important.
  3. JoshuaHeckathorn

    JoshuaHeckathorn Administrator

    Cap1sucks is right. You need to get the utilization on that card under 30%, preferably 10% or less, if you want to see a boost in your score.
  4. Hedwig

    Hedwig Well-Known Member

    But with a score above 720, it's not that big a factor.

    Are you making a major purchase in the near future? If so, see if you can find out what the cutoff score for best financing is.

    If you only need 720 or above, pay off the highest interest rate first, which will benefit you most in the long run. If you do need to get your score up, then getting the utilization down is more beneficial in the short term.

    If your scores are good enough for what you want to accomplish, don't take your eyes off your long-term goal.
  5. JoshuaHeckathorn

    JoshuaHeckathorn Administrator

    Hedwig makes a good point. I just assumed you are interested in improving your credit score. If you're more concerned about saving dollars and cents, paying off the card with the highest interest rate is always the best strategy.
  6. Alodar

    Alodar New Member

    Thanks for the responses everyone....they are helpful.

    Joshua, until recently, I was just concerned with saving money as I paid off my credit cards, which was why I was paying them off highest rate to lowest rate. But now I have a large purchase on the horizon...

    Yes, I (and my fiancee) are going to be buying a home within the next 6 months or so.

    My credit score is now 728, and while I don't know her exact score, I know it is 800+.

    Would our credit scores be "combined" in any way? If so, how is that figured?

    Thank you again!!!
  7. Hedwig

    Hedwig Well-Known Member

    If your score is above 720, you shouldn't have anything to worry about, as long as your income and liabilities are in line.

    You might want to talk to a broker to make you feel better, but I don't really think you need to be worried about scores right now.
  8. Alodar

    Alodar New Member

    Well, I was asking because I just was sent an article from the Chicago Tribune that mentions 740 as the "cutoff" for "the best" interest rates.... So I wondered if her 800+ might raise my 728 until I get it above 740 myself....

    Thanks again
  9. Hedwig

    Hedwig Well-Known Member

    I think it depends on the loan and the area. I'd still suggest checking with a broker.

    And have you checked all three of your real scores (not the FAKO ones you get at a lot of hte 3-in-1 sites)? They usually consider your middle score.
  10. JoshuaHeckathorn

    JoshuaHeckathorn Administrator

    Most lenders will require a score above 750 to get the best terms and conditions these days. They will look at both of your scores individually, but her score of 800+ doesn't really raise your score. They don't average your scores or anything like that.

    If you make a large enough down payment and have the income to support the loan, I don't think you will have any problem getting the loan you want. Be prepared to provide tons of documentation though. Working with underwriters is like pulling teeth lately.

    As Hedwig mentioned, you may want to begin the process by speaking with a respected broker in your area.
  11. apexcrsrv

    apexcrsrv Well-Known Member

    Josh is right . . .

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