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New Contributor
Posts: 62
Registered: ‎09-12-2009
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How to pay off debt

Well I'm devastated. My creidit score just took a dip into the "not good" catergory. My score had been as high as 710 within the past 6 months and now it's 654. Wow talk about feeling like giving up. So I have some money from my tax return that I can use to pay some things off. I'm wondering if I should attempt to pay each card down below a 30 or 70% utilization or should I pay off the lower balances. Last card I applied for said I didn't get because of two many cards with balances so it seems that it hurts because I have too many cards. Confused....I've worked really hard since 2009 to bring my score up from 620 and now it's dropping again so don't know if it's been worth it.  Any help?

starting anew
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Super Contributor
Posts: 7,513
Registered: ‎09-22-2012
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Re: How to pay off debt

What are the balances and interest rates?  I would start with the high interest cards.

New Contributor
Posts: 62
Registered: ‎09-12-2009
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Re: How to pay off debt

So having balances on too many cards is not a factor? 

starting anew
Established Contributor
Posts: 539
Registered: ‎07-12-2013
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Re: How to pay off debt

IMO

 

http://financialplan.about.com/od/creditdebtmanagement/a/Get-Out-Of-Debt-With-A-Debt-Snowball.htm

 

reduces DTI fastest by eliminating monthly pmts.  if high rate cards are left with balances it will keep you motivated to cross the finish line


Current Score: EX 712 4/28/15, TU 713 4/14/14 lender pull, EQ 722 7/1/15, 740 EQ bankcard 8 6/1/15 lender pull
Last app 6/1/15
Banks I have Blacklist/Return to sender: Langley FCU, BofA, Barclays, Citi

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Super Contributor
Posts: 7,513
Registered: ‎09-22-2012
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Re: How to pay off debt


paturner wrote:

So having balances on too many cards is not a factor? 


It can be if you're applying for new cards or CLI, but if you're at the point of throwing your arms up I would focus on minimizing finance charges until you have everything back in order.

 

Established Contributor
Posts: 582
Registered: ‎03-09-2010
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Re: How to pay off debt

Don't let your credit score cost you money, pay them all off in order of highest intrest rate first until you are left with a tiny balance on one card. Don't apply for new cards until this point or you will just get tiny limits or denials.
Established Contributor
Posts: 582
Registered: ‎03-09-2010
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Re: How to pay off debt

Snowball method only reduces DTI faster on paper. In reality it costs you more money because you pay more interest.
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Super Contributor
Posts: 7,513
Registered: ‎09-22-2012
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Re: How to pay off debt

[ Edited ]

paturner wrote:

Well I'm devastated. My creidit score just took a dip into the "not good" catergory. My score had been as high as 710 within the past 6 months and now it's 654. Wow talk about feeling like giving up. So I have some money from my tax return that I can use to pay some things off. I'm wondering if I should attempt to pay each card down below a 30 or 70% utilization or should I pay off the lower balances. Last card I applied for said I didn't get because of two many cards with balances so it seems that it hurts because I have too many cards. Confused....I've worked really hard since 2009 to bring my score up from 620 and now it's dropping again so don't know if it's been worth it.  Any help?


Also, that's up to the individual.  I view my own credit as my financial reputation and will do everything in my power to maintain it.  It can be hard not to obsess over your score, but the link bobbay posted has really good information about 1 approach to repair, but like Chris says it can cost more money.

 

Valued Contributor
Posts: 1,507
Registered: ‎07-24-2011
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Re: How to pay off debt

Why don't you join this thread?  Everyone there is helping each other with the best scenario to pay off their debt fast and with the least amount of money.

 

http://ficoforums.myfico.com/t5/Credit-Cards/The-GREAT-CC-Payoff-Challenge/td-p/2689987


Major CC's - Barclay's ($5.5K) | Barclay's Sallie Mae MC ($5K) | DCU ($7.5K) | Discover IT ($1.4K) | Genisys Visa ($1.4K) | NFCU Visa ($22K) | Navcheck ($15K) | Chase Freedom ($5K) | SDFCU Visa ($8K) | Amex BCP ($9.5K) | Amex Delta ($10K) |Store CC's| -Amazon ($4K) | Catherines ($850) | JCP ($4K) | Macy's ($1.7K) | Avenue ($850) | Victoria's Secret ($1.4K) | Walmart ($4.1K) | Paypal SC ($1.3K) | HSN ($2.5) | Sears ($2.6K) | Sams Club ($4.1K) |Goal|: Age with grace to 750 across the board |Last app|: 3/3/2014
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Established Contributor
Posts: 794
Registered: ‎07-01-2013
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Re: How to pay off debt


bobbay wrote:

IMO

 

http://financialplan.about.com/od/creditdebtmanagement/a/Get-Out-Of-Debt-With-A-Debt-Snowball.htm

 

reduces DTI fastest by eliminating monthly pmts.  if high rate cards are left with balances it will keep you motivated to cross the finish line


 

I use this method, It works. I call it the pyramid plan though, I didn't think it actually had a name =P

 

Right now all my accounts are high balances, But when I had many small balance accounts, I paid off 3 accounts with one of my checks, then another one on the next check. It was working until I landed in the ER twice in less than a week with no insurance, lol.

ManiacGamers.comManiacGamers.comManiacGamers.comManiacGamers.comManiacGamers.comManiacGamers.com****$20,000**********$5,000***********$4,100***********$3,500**********$2,500***********$1,000****
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