Which Credit Cards Should I pay down below 30%

Discussion in 'Credit Talk' started by clueless19, Jan 19, 2017.

  1. clueless19

    clueless19 New Member

    I have four credit card accounts that are maxed out.

    3 are $12k each, 1 is $30k.

    I have gotten some money and so can make payment and reduce the balances.

    I do not have enough to get all accounts below 30% (Debt to available Line), But can make some
    accounts under 30% and the rest below 50%.

    Which scenario improves my credit score the most?

    Make the three smaller accounts below 30 %, and the larger account below 50%.


    Make the larger account below 30%, and the smaller accounts below 50%

    Please advise?
  2. jam237

    jam237 Well-Known Member

    I don't know if the individual ratios matter as much as the combined ratios.

    The best choice for me would be to drop the most to the highest interest rate, and divide the rest between the other two.

    That way, I am making the largest dent in the interest payments for the future of the accounts.
  3. clueless19

    clueless19 New Member

    Thanks for your reply

    The combined ratio will be the same regardless of which accounts I pay. And I understand its a good general idea to pay off higher interest loans first. But what my goal is is to improve my Fico score as quickly as possible.

    All I read about improving FICO scores, say that both combined AND individual ratios count. I was hoping for an answer /opinion regarding whether there was a difference between having more small accounts with lower ratios, versus the one larger account having a lower ratio.
  4. clueless19

    clueless19 New Member

    Maybe it will help to provide some more information

    I am planning to refi my mortgage. And with the refi proceeds ALL my credit card debt will be paid off. However in order to be approved for the refi my FICO score needs to improve. Thats why I am asking for what to do in the short term, with the money I have, to increase my FICO score.

    I now have 4 scenarios

    A. All accounts paid off by the same percentage.
    B. Multiple Smaller accounts at 30 %, with the larger account at 50%
    C. Or largest account at 30% with multiple accounts at 50%
    D. Pay off as many small accounts as possible, transfer balances to the largest account.

    Which scenario works best to affect FICO score? If you recommend one over the other please explain why?
  5. JoshuaHeckathorn

    JoshuaHeckathorn Administrator

    Hey clueless- thanks for the additional info. and good luck with the mortgage refi.

    As you probably know, your credit utilization ratio accounts for 30% of your FICO score. Nothing has a bigger impact on your FICOs scores other than your payment history.

    If you're not interested in paying off the debt with the highest interest rate first in order to save money, I would go for paying down the 3 smaller accounts to under 30%, and then paying off as much as possible on the larger credit card. The general idea is it's better for your FICO score to have as many accounts as possible under the 30% threshold, although keep in mind that there are many other variables at play in your FICO scores.

    Let us know how it goes and what impact you see on your FICO scores!

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