The Long Road to the CSR

[Doctor_E]

Background:

• Turning 30 this year and hoping to transition to credit cards with rewards that better suit me now (UR instead of Best Buy rewards)
• Resident physician in my 2nd year. Will be done in June 2019 with a possible fellowship through 2021-2022.
• Chase customer since 2012 and currently have their Southwest RR credit card ($6k,) an auto-loan (initially $28k, currently paid down to $20k over the past 1.5 years without late payments,) and a checking account.
• AAOA ~6 years depending on the credit bureau
• Current FICO is 655 due to high credit utilization (my four main cards had been close to max'd out but my overall credit utilization was ~75% last month,) high student loan debt from medical school (~$300k,) and a late car payment back in 2013 on my previous Volkswagen lease (through VW credit.)
• I owed about $15k in CC debt as of 1/2018 and currently have that number down to $11k as of this month, with plans to be under 30% by July and completely paid off by October. I'm hoping that once I've paid the majority of my CC debt off, I'd be looking at a FICO >700.

My main question is when could I realistically apply for the Chase Sapphire Reserve and Freedom Unlimited? Assuming I can bring that FICO up to over 700 through my aggressive debt paydown, how many months should I wait before going through with the applications? I currently use the SW and a Best Buy credit card as my main cards but I'm hoping to transition by the end of the year. On a side note, would it be unreasonable to obtain a personal loan through my local credit union to pay off my cards earlier at a lower APR (some of my cards have rates in the mid 20%'s) or should I just wait until October to pay them off through monthly budgeting?

[CreditCuriosity]

Get down your overall utilization down to 30% ideally and on each individual card below 30% as well not just as an aggregate for better results.  Ideally you want to be below <10% debt, but that isn't always realistic and below 30% is fine IMO.  Once paid down make sure it reports to all CRA's being the lower debt before applying for it.  Just dont pay it down say today and apply tomorrow or you utilization will stil show 75%.

[Doctor_E]

Thanks for the reply. Even if I completely pay off the Chase SW card, I'd assume that Chase would look at how long it's been since I had max'd out the card. Do you think there's any value in keeping the utilization < 10% for a couple months before applying or is the mere fact that I paid it down sufficient?

[CreditCuriosity]

Mere fact it being paid off should be good.. You will see a huge score increase as well getting your utilization down.

[Anonymous]

You can definitely do it.

Having SW paid will bring your score up, I would wait probably 30-45 days after paying in full to apply just so you're 100% sure you get the full effect and all the points possible.

Definitely apply for CSR before CFU, because CSR is a harder card to get and at the end of the day if they only approved you for one you'd rather it be CSR! (I've read plenty of times where people do it backwards because they figure they're going to get approved for both and end up stuck with only Freedom Unlimited!)

See if you have any friends or family with CSR that can refer you that way they get 10,000 UR too! I figure it's good karma and that person is likely to at least buy you dinner

[Doctor_E]

Thanks for the great advice! Forgot that my brother-in-law has the CSR so I'm sure he'd appreciate the referral points. So are you recommending that I don't try to apply to both on the same day? I'm under the 5/24 rule, only having obtained the SW card in 1/2016 (and my only other new accounts are the Chase auto loan in 6/2016 and furniture financing in 7/2016.)

[Anonymous]

You can apply for both on the same day, but apply for the CSR first.

[Doctor_E]

Ah, got it. Thanks!

[Anonymous]

Definitely as ALK said, both on the same day is fine but do CSR first.

Usually if you do both in the same day it benefits you because they usually (YMMV) only do 1 HP rather than 2 separate.

Also, I'm sure your Brother in Law would love 10k UR Free, I doubt anyone would turn that down