FICO score details - Should I try Score Watch at myfico.com?

[Ralph]

I have some 0% rates expiring on Credit Cards, so I want to transfer them in the way that makes the most sense and minimizes the hit on my FICO score. One goes to 14% and one to 12%, so I pretty much HAVE to transfer them, even if it does hurt my FICO score a little. I guess the key is to keep FICO in Tier 2, above 700. And yes, I do plan to work hard to start getting these balances down. I know they are killing me, since I am about at the end of the road for 0% rates.

Right now BoA is offering 0% and 3% rates to me. I have 3 cards with them.

Card 1: 0% expiring now, already transferred some to Capital One, need to transfer the rest somewhere else.

Card 2: 0% offer, fairly low limit.

Card 3: 3% offer, also fairly low limit.

And one with Wamu that I need to pay since it is going to 14% with a pretty big balance. So I want to pay off Wamu with BoA 0%. And yes, I desperately want out of the CC juggling business.


BoA is offering to combine the last two into one so I can get more on the 0% offer, so I wonder how that will affect my FICO score. I am not sure of the details of how they will do that, i.e. will they close one, etc.

But the real question is how much does borrowing near the credit limit hurt my FICO score? Is it a continuous scale, or more of a tier system like the FICO score itself? I have seen 30% and 50% tossed around, but I was thinking more like 90% versus 70%, etc. I figure I CAN'T afford to pay 12-14% on a big balance, so it's better to take the FICO hit now and try to recover it.

On a similar subject, how about payments and FICO score? If making the minimum payment is bad for my FICO score, how much above minimum do I have to pay to fix that? $1? 120% of minimum? 150% 200% Is it a continuous or tier system? And would subscribing to something like Score Watch at myfico.com show that kind of detail? I'm going to watch the demo now and I'll report back with what I find. Actually I guess I just need the detailed calculation algorithm, or a calculator like the nice one Wamu has on their website but maybe a little more detailed. They do have a very nice feature, where it tells you the one thing you can do to raise FICO. It says two things - pay down the debt (duh!) and make more than minimum payments, but of course paying down the debt to limit ratio is not feasible for me now, but making slightly bigger than minimum payments is.

Thank you! And I promise to work hard at getting out of this (hell)hole of debt! And as you might have guessed, I can't afford to pay much over minimum without incurring MORE debt, but if paying a little more will help my FICO score, I will definitely do that.

[waijai]

Can you provide a little bit more information regarding each card, it's balance, and each minimum payment along with your current income/expenses?

[Ralph]

OK, I can feel the noose tightening. BoA cancelled cards 2 and 3 AFTER they sent the 0% offer, they say for inactivity. Soooo,

Card 1 has a lot of money going to 12%, and Wamu has a lot of money going to 14%. I was only about to get some transferred off BoA to CApital One, so maybe that's why they are not reopening the other two, I made them mad.

But what I was really looking for here (or I would have posted in the debt forum) was whether myfico.com is a good tool and since I got no answers, I think I will try a trial of it. For instance, will BoA closing these two inactive accounts hurt me? It seems that my short term financial survival depends on becoming a FICO expert. I know I score well on on-time payment but get dinged for this albatross of debt hanging around my neck, and rightly so.

So now my options are few. I have to check other credit lines and then think about withdrawing from savings to get rid of this debt, which I REALLY don't want to do due mainly to the tax hit.

[waijai]

Withdraw from savings? or withdraw from 401k/retirement accounts? You really shouldn't be wasting money on the Score Watch IMO, as it'd be better to use that money to pay down your debt, no matter how small the amount is.

[HMG]

[quote=Ralph;201767]IOn a similar subject, how about payments and FICO score? If making the minimum payment is bad for my FICO score, how much above minimum do I have to pay to fix that? $1? 120% of minimum? 150% 200% Is it a continuous or tier system?


Paying your minimum amount on your credit cards is NOT bad for your credit score. In fact, approximately 35% of your credit score is determined by whether or not you pay your bills on time. So, in essense, paying only the minimum on time is good for your credit score.

However, if at all possible, you should pay more than the minimum because you'll pay off the cards much, much faster. Plus, it may help your credit score since it changes your debt to debt available ratio.

A good website to go to and figure out just how more you want to pay than the minimum is bankrate.com. They have tons of calculators that you can use, including one called "The True Cost of Paying the Minimum". That calculator will help you to determine how much more you want to pay.

I agree with the earlier person about not paying to subscribe to the service. Just pull your credit report for free each year (not your score) by going to annualcreditreport.com. You're pulling it to make sure that there aren't errors or fraud activity. Unless you're super-concerned about fraud, there isn't a huge reason to fork over that money when you seemed strapped for cash as it is.