Paying down credit card debt - Questions

[niko79]

I already got some CLIs on Synchrony (13k) and 5k on Chase Slate but no BT offers. I should probably call and inquire. Thanks for the idea. Might be worth looking into it.

[Thomas_Thumb]

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@niko79 wrote:

Welcome!

So, I am finally taking the initial steps to paying down the CC debt and will pay about a third of what I owe on the credit cards. It is not much but its is a good start I think. I have 19 opened CC accounts, 16 with balances. I am trying to find our what is the best way to pay them down to get the highest FICO scores out of it for the time being so I can consolidate the rest via Lending Club or Prosper loan into one single payment not at 25-30% interest.

Long term goal is saving for the mortgage and having high enough FICO scores to get one. We have two incomes totaling 151k. Wife does not have almost any debt.

Here is the spreadsheet of the cards I carry and the pay down amounts I am thinking about making at this point:

	Credit Line	Current Balance	Pay Down	New Balance	Min. Payment
Chase Slate	500	450	450	0	25
Chase United	7100	7000	1000	6000	125
Chase Freedom	5000	4700	1000	3700	125
Chase Marriott	5000	5000	1000	4000	125
AMEX		680	0	0	0
Discover	3300	3200	1000	2200	100
AA	3250	3000	1000	2000	100
Care Credit	5000	2200		2200	78
Amazon	2500	250	250	0	25
Macys	1900	1800	800	1000	60
BestBuy	900	830	830	0	25
Lowes	10000	300	300	0	25
Merrick	400	100	100	0	39
BR	1000	270	270	0	25
CapitalOne	700	600	600	0	25
CapitalOne	750	400	400	0	25
CapitalOne	950	950	950	0	25
Total	48250	31730	9950	21100	952

I understand I am still being left with around 20k in debt but I gotta start somewhere. BTW, even after having about 10-15k in debt last year, I had FICOs over 700 on each report. I am still waiting for a big loan payback from parents after they sell the inherited house overseas. 

Please help

Thank you! 

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Congratulations on the improvement. Not sure how things have changed on your summary table - perhaps you can update it.

Here are my suggestions:

1) Get aggregate utilization below 20% (balance down to $9,650 or less).

2) Get utilization on ALL individual credit cards to under 50%

3) Pay off low CL cards so they report zero balance - Looks like you have 17 cards Get # open accounts reporting a balance to Under 50% (8 cards max reporting) and preferrably under 33% (5 cards reporting).

I think you will be surprized at how many additional points you can gain by dropping UT% further and reducing # cards reporting to less than 1/3.

[niko79]

Thank you!

My UT is now about 10%. I have only a balances on:

Discover: $1800
CareCredit: $2250
and 3 Chase accounts: each less then $250 each (interest and other leftovers) which I will pay next month to 0. That will leave me with these 2 balances and everything else will be 0!

FYI: the 18k CLI has yet to reported to the bureaus so I hope that will give me more points. Let's see soon.

[Anonymous]

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@niko79 wrote:

Thank you!

My UT is now about 10%. I have only a balances on:

Discover: $1800
CareCredit: $2250
and 3 Chase accounts: each less then $250 each (interest and other leftovers) which I will pay next month to 0. That will leave me with these 2 balances and everything else will be 0!

FYI: the 18k CLI has yet to reported to the bureaus so I hope that will give me more points. Let's see soon.

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Congratulations on the amazing progress!

[Thomas_Thumb]

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@niko79 wrote:

Thank you!

My UT is now about 10%. I have only a balances on:

Discover: $1800
CareCredit: $2250
and 3 Chase accounts: each less then $250 each (interest and other leftovers) which I will pay next month to 0. That will leave me with these 2 balances and everything else will be 0!

FYI: the 18k CLI has yet to reported to the bureaus so I hope that will give me more points. Let's see soon.

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Awesome - you definitely exceeded your plan.

Getting your aggregate UT down to 6% gives you optimal aggregate utilization [for scoring] based on my experience. Generally rule is under 9% works but I stay between 1% and 6% myself.

Allowing a couple cards to report balances in the 10% to 30% range really should not hurt your score - although some advise you need to stay below 10% on everything.

I also suspect your score will be "optimized" from a # card reporting a balance perspective in the 1 to 2 card range - maybe even 3 cards. [just make sure you allow some positive balance to report on a card each month. If you report a zero or negative total across the board, score could drop 20 to 35 points]