All of my CC's are over the limit at the most $150.00. I have 6 cards, and 4 of them are over the limit by no more than $100.00, and the other 2 are approx $100.00 under the limit.
If I get the 4 cards below the limit will this have a great impact on increasing my FICO score. I don't have much money to work with, and I thought at least getting the cards below the limit may help.
I know that the best scenario is to pay them off, but I'm unable to do so.
That's your first step. And you really need to shoot for more like 85-90% of each card's CL, not just right at the CL.
***OK, first step (of course) is to do whatever it takes to stop using them. Take them out of your wallet, freeze them in the freezer compartment, put them in a safe deposit box. Go straight cash or debit card for a while. If you use a debit card, make sure that you're balancing your checking account daily and not relying on what the bank says your balance is. You'll pay a ton of fees for overdrafts if you're not used to this.
After getting them all back under their limits, start taking them down to 49%, one at a time. If you start with the smaller cards first, it will go more quickly. Or you can go with the highest-APR card first. Once they're all under 50%, just keep taking them down in the same manner.
An alternative is the debt snowball, where you pay off the smallest one first while continuing to make minimum payments on the others. When that one's paid off, start on the next smallest, adding what you were paying on the first card to the minimum you've been paying on the second. Keep going in the same manner.
One worry about the debt snowball is if a card that you really want to keep is last in line for payment, the lender might yank the rug out from under you before you can start on it by closing the card. So you might want to factor that in.
But whatever tactic you choose, get them all under their CL's first. Right now, your danger is not so much from low FICO scores but from lenders checking your reports, freaking out, and closing your cards.
Patience and persistence --good luck!
Will getting them below the limit cause an immediate increase in my score??
I think so, but again, I think it has to be below 85 - 90% to be called "not maxed."
We need some others with recent experience on this to chime in.
I agree with everything that HTSU said but in addition I would counsel that you put all your attention to getting those balances down and not even worry about your score. It will continue to be affected negatively for quite awhile so just be aware of that and be prepared for that but know that with hard work you can get everything in order. Lower balances=higher scores.
Good luck to you. Let us know your progress.
From a BK years ago to:
9/09 EX pulled by lender 802
3/10 EQ- 800
4/10 TU -772
You can do the same thing with hard work
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