Utilization

[Anonymous]

what are your APRs?

[fused]

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gandalfdawize wrote:

Contract for home is $525,000

Placing 20 percent down $105,000

Have 12 month reserves.        Ran fico simulator and it indicated that score would go into the range from 635 -665 if i paid $32000 in one month.

Just curious where for utilization to disburse funds.

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What are your FICO scores now?

[haulingthescoreup]

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@Anonymous wrote:

Also have Valero Gas Card Limit $700 Balance $200

Two installment loans (one car loan with balance $11000 and one small installment loan with the balance only $361)

have 5 Citibank Premiers that don't display the limits but the balances are all at around $9000

Have $30,000 that I will take out of savings and pay down the balance on cards with the goal of purchasing a home by the end of this month. I plan to use rapid rescore with my mortgage company to report the new balances.

Can anyone tell me where I should distribute the $30,000 to get the most bang out of my fico scores.

The smaller cards that report limits were the ones I was planning to pay off first for example

(Capital Credit Union Limit $5000, Pay Balance 0

Citi Bank Limit $1500 Pay Balance 0

Chase Limit $700 Pay Balance 0

Valero Limit $700 Pay Balance 0

Dillards Limit $1700 Pay Balance 0

Installment Loan Balance $361 Pay Balance 0

Hooters Limit $10,000 Balance $5000

BMW Limit $15000 Balance $7500

USAA Limit $25000 Balance $17600

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Well, it isn't going to free up a bunch more money, but I would suggest that instead of PIF'ing the cards you listed, pay them down to 9%. You can apply the extra money to other cards. Eventually you only want to have 3 or 4 cards reporting a balance, but you've got a ways to go before you're there.

Otherwise, get as many cards as possible under 50%, not at 50% (knock some more bucks off of your 50% pay downs) and don't let any be maxed. And then keep on going! You've got a pretty frightening credit usage going, and there are the Citi cards that don't even report. IMO, you've got bigger issues to work on than qualifying for this mortgage. Hope it works out for you.

[Anonymous]

Fico Equifax 585.

Broker said just get to get the scores back to a minimum of 620 and not to bother about paying the entire balances off.

[Anonymous]

Received preapproval for score at 620 with 20% down.

[Anonymous]

Credit Card                      Limit        Balance    current Util.
USAA                             $25000       $24400           96%
BMW                              $15000       $14000          93%
CCU Master Card          $5000        $4700             94%
Chase                            $700          $600                86%
Citi                                $1500         $1000              67%
Hooters                          $10000       $9000           90%
Dillards                         $1700        $1600              94%
Valero                           $700         $200                 29%
5x Premeir cards           n/a           $40000             n/a
total utilization:            $59600       $95500           160%

I think your 5x premeir cards are screwing you.  With a $40,000 and no reporting limit, they totatly screw your utilization.  If not for the 5x Premeir cards, i would do something like this with the $32,000 you have to get your bills down:
 
Credit Card                      Limit               new Balance (paid)           new Util.
USAA                             $25000                 $12500 (11900)                50%
BMW                              $15000                $7500 (6500)                     50%
CCU Master Card          $5000                       $0    (4700)                    0%  
Chase                            $700                         $0    (600)                      0%
Citi                                 $1500                       $0    (1000)                    0%
Hooters                          $10000                   $3500 (5500)                 35%
Dillards                         $1700                         $0    (1600)                  0%
Valero                           $700                          $0    (200)                     0%
5x Premeir cards         n/a                           $40000                          n/a
total utilization:             $59600                     $63500                         107%
Total spent:                                                   $32000

Well that is how i would do it with the information you gave me.  I dont know though, i still think them 5x Premeir cards are killing you.  Call them and try to get some type of credit limit or something reported.  Maybe someone wiser then I will post with their views.

Good luck though, with this budget/pay offs, you get your overall utilization of most of your cards down.  I would then pay off hooters, BMW, then finish off the USAA.  Again, i really dont like those premeir cards, maybe it would just be better to pay those all off first then go to your others. 

Dont worry too much about your installation loans, just dont be late on those and you are good.  Get that Revolving utilization down and your score will soar.

Robo

Message Edited by Robo on 10-09-2007 12:08 PM

Message Edited by Robo on 10-09-2007 12:11 PM

Message Edited by Robo on 10-09-2007 12:16 PM

[Anonymous]

Thanks for the great advice!.  I'll have an additional $10,798 a month starting in January 2008 that I will use to start paying off balances of  the Citi Premier cards and looking forward to having only a $1,000 a month card to pif each month.  Had to max out the cards for my practice until we won a big case. 

[Anonymous]

Np on the advice, i think it is sound but maybe others can give their views.  With the extra 10K in Jan, you will have all the accounts with reporting limits to 0 by Feb.  Then a few more months and the Premeir cards will be done. 

I would honestly suggest putting those Premeir cards in the sock drawer and asking for a CLI on your USAA card.  Make that one your card of choice for big spending and just hit up your other cards now and then to show some use.  Remember, keep the utilization away from 85%, this is considered a maxed card and i hear is just as bad as a charge off.  As always, your goal is to maintain 0-9% utilization.

I dont know your APR on your cards but even if they are high now, with you paying down your debt and showing a good history of paying on time, i would definetly ask for lower ones.  So pay debt then ask for the CLI and lower APR!

You are on your way to being set IMO.   GL!

Robo