I need advice

[Anonymous]

My husband and I got into a heap of trouble with our credit cards. Everything still in good standing but are scores are around 665. I will be taking the money out of my 401K (since I don't contribute and I am a stay at home mom) to help pay some of it down. But we still need more - we have to get a second on our home. We recently closed some cc accounts hoping that would help our score, but they still have high balances. Somebody told me to pay the high cc's down to 50% of the limit and our scores will go up. Is this true and does it matter if the accounts are closed??

[sunrise]

Welcome!!

Paying down your cc's to a lower util will help boost your scores, I would go below 50% though! FICO likes to see very low util (less than 10%)   (..unless you are me.....FICO hates me below 10% util...long story, won't apply to you though, cause you aren't me!)

You only posted one score, where did you get it?  Is it a FICO or FAKO? 

If your middle FICO is 665 that is a decent score for mtg. loans.  But, other things are considered, such as DTI, salaries, home value, equity, etc.  You will need to post any mortgage questions on the mortgage forum, and ShanetheMortgageMan should be able to help!

ALL credit card util is factored together. So, if you have 2 cc's and one is maxed and the other is at 50% util (assuming they have equal credit limits) you are still at 75% util.  So, you need to be chipping at all of them. 

If you are going to start paying them down w/ your $ from 401K I would pay maybe a little more to the ones that have a really high interest rate! 

Can you re-open your cc's that you closed? But, don't use them!  Sockdrawer them! Closing them may have hurt your scores, especially if they were positive TL's.  If you can get them re-opened you may see an increase in your scores having the positive TL's back!?

This is my opinion!  Others may have more suggestions/ideas

[Anonymous]

On closed CC with a balance - the balance counts in your util but not the CL so if you close a cc with a $2K balance and a CL of $3K - you lost the positive from the $3K and the $2K counts against anything left.  MAJOR OUCH!

beg and plead to get those re-opened - say how much you loved your relationship with them (lie if you must) and how very stupid it was to close your card.  Even if they only reopen at a CL of the present balance - it will help.

Message Edited by Lady_Scarlet on 01-14-2008 06:51 PM

[Anonymous]

well - we have a lot of credit cards and I just closed some last week and they were the ones that had higher limits. I got bad advice from someone who said close them so it will notice that you can't charge on them, and then I came to this website and found out that that isn't always the case. So I guess I should try and open them and then pay them down. The rates are through the roof - I feel like that guy from the commercial that is in debt up to his eyeballs!

[Anonymous]

rates won't get better with them closed.  You need to boil in oil whoever told you to do that...