Which route to get the best FICO boost???

[UpAndComing74]

I have totaled my vehicle and now desperately in need of another!  My credit union needs my TU FICO to be 630 in order to get “C” tier rates at 6.59%. I want to pull credit on 3/15.  I pulled on 2/08 and low and behold 2 old charge-offs have hit the account causing my TU score to plummet  down to a 528.  I NEED 102 points in 30 days!! My question is this:  Should  I pay down my credit cards?  I currently have 4.  I have:

Cap 1 bal 724/cl 750

Cap 1 bal 554/cl 500

CU Credit Card bal 4439/CL 4000

HSBC  bal 1111/CL 1100

Target bal 171/CL 200

On Feb 29th, I will have $3000 extra  dollars to apply to my credit report.

OR should I focus on 5 collections I have on my TU report?  They are as follows:

LVNV Funding Date Opened 9/11 Balance $522.

OC for LVNV “Cortrust” reporting a $0 balance.  DOFD 11/07

NCO Collection Placed for Collection December 2011 Balance $160.  I paid the OC prior to them placing it on my report                                                                                   Enhanced Recovery Placed for Collection  October 2011 Balance $228            

Midland MCM  Placed for Collection June 2008    Balance $1463                  

ATT  Placed for Collection  September 2011  Balance $0…I paid the OC.

Those are my only negatives.  Along with that I have 32 lines of Credit that are ALL Paid as agreed!!!  Aging back to 3/08. This includes a mortgage and prior auto loan.

Since these charge offs are recent I know they are killing my scores.  So I have a choice with my 3K.  Pay off the credit cards for a score boost or beg and beg for PFD for these collections and hopefully get a score boost that way.  Sorry for the long read, but ANY and ALL advice would be appreciated. I didn’t plan on totaling my vehicle but now I gotta deal with it.  Help, Help, Help!

[Anonymous]

That is easy..Pay off your credit card..100 to 150 boose

[UpAndComing74]

If you say so...That I will do.. I can then fight with the charge-off as time permits.   A couple of them are due to fall off next year anyway.

[Anonymous]

Just an honest reply here,

Right now you are way over extended on credit.  Your individual and overall util is killing your scores.  But in all honestly, applying that $3000 to your credit cards will not get you a "100 to 150" boost as stated.  You will still have an extremely high util after a $3000 pay down, no matter which card(s) you apply it to.  You will see an increase in getting these balances down but not nearly enough to get you where you want to be.  Also, I wouldn't be surprised if these CC balanced chased you as payed them down.  You would then be in the same boat you're in now.  If I was in your shoes, I would take the $3000 and buy myself a used car to get by while cleaning up the baddies and bringing those balances down. 

Cap 1 bal 724/cl 750 = 96%

Cap 1 bal 554/cl 500 = 110%

CU Credit Card bal 4439/CL 4000 = 110%

HSBC bal 1111/CL 1100 = 101%

Target bal 171/CL 200 = 85%

Total Util = 106%

After a $3,000 pay down Util = 61%

We all know "stuff: happens and that how must of us found this site.  To take care of that "stuff".  Just be careful not to bury more stuff on top of the original stuff. 

[FrugalRican]

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@Anonymous wrote:

That is easy..Pay off your credit card..100 to 150 boose

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Seriously?

[UpAndComing74]

Honesty is the best policy.  Truth be told, Its not like Im on the bus or walking.  My wife has a car that we can share.  Im just so frustrated that all of a sudden the charge offs hit RIGHT when I needed the credit. I may just sit back for about 6 months and pay off all CC, negotiate charge-off and hire credit repair if I cant convicne them, and see where I stand then.  No real need I dont guess to bite off a new car, if I dont really NEED it.  I can drive a used one to get me from A to B.  Im curious to see if paying off my CC's provide any boost though.

[Anonymous]

I agree with TJMMP.  You would be much better off getting a used car and saving those monthly payments to start digging yourself out of that CC debt.

On a side note, I would recommend against hiring any credit repair companies.  That money would be much better spent on paying down your CCs.  You can do anything those companies do yourself for free, or at least only the cost of postage.

[MarineVietVet]

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@UpAndComing74 wrote:

Honesty is the best policy.  Truth be told, Its not like Im on the bus or walking.  My wife has a car that we can share.  Im just so frustrated that all of a sudden the charge offs hit RIGHT when I needed the credit. I may just sit back for about 6 months and pay off all CC, negotiate charge-off and hire credit repair if I cant convicne them, and see where I stand then.  No real need I dont guess to bite off a new car, if I dont really NEED it.  I can drive a used one to get me from A to B.  Im curious to see if paying off my CC's provide any boost though.

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If it was just high utilization then going down to 61% (still too high but not overwhelming) would give you a boost. And although paying down revolving balances is the fastest way to raise a score those recent CO's plus the older collections would far outweigh any help a reduction in utilization would bring IMO. A 100 point boost? It's not going to happen I'm afraid.

Plus you won't likely be able to resolve any of the collection or CO issues in less than 30 days. Unfortunately the systems just don't work that quickly.

[Anonymous]

Paying down those cards will get you a boost, no doubt.  I would be concernced that since you are at or over your current limits that as you bring down the balances they will bring down the limit right along with it.  Then you're right back at square one.

And ditto on the credit repair.  There's SOME good ones out there, BUT what they can do so can you.  All while saving money. 

[llecs]

I would vote for a 100 point increase if OP hit all $0 balances except for the one, with that one under 9%. But with a budget of $3k, I don't think OP will get there on util alone. And that would be assuming the #1 negative scoring reason was util, which it isn't. I personally hit 125 on EQ after bringing util down by 90% to under 3%, but I had a clean report.

If I only had $3000 to work with, this is what I would do:

I'd pay off:

CapOne #2 ($554)

Target ($171)

CapOne #1 ($724)

I'd pay down:

CU CC by $550

HSBC by $200

That leaves a remaining balance of $800.

I would commit to paying the following AFTER I take the steps necessary to insure a deletion:

LVNV for $522

Enhanced Recovery $228

And the remaining $50 or so I'd toss as a remaining CC balance.

Reasoning....

The util is super high. You are also over the limit too on a couple CCs. Moreover, FICO likes $0 balances as opposed to all with a balance. I bet if you pay down like mentioned, your util will drop from 105% down to 73%. The change in util probably won't net you more than 15-20. Even if you forked all of the $3000 at util, I don't think you'll hit above 20 at best. Get the util under 30% and you'll start seeing some movement. But I think you can hit 15-20. Plus, you are over the limit. This plan would eliminate that problem. FICO dings you extra for being OTL and I bet you can see an extra 10 points. Finally, FICO likes $0 balances. Under the plan, 3 of your 5 accounts are at $0. I bet you'll see an extra 10-15 for that alone. So, all together, your gains are an estimated 30-40 points on util and CC balances alone.

Two of your five baddies are paid. Those are hurting you as much as if they are unpaid. Also, FICO doesn't care if your balance is $0 or $10,000, COs and CAs hurt equally paid or upaid. So, ignore the balance. But would take steps to remove the two paid and take steps to remove the two smallest AND newest too. I bet you can see a 50-70 point gain alone when the baddies are removed. TU can be sensitive to baddies.

Combine the util and baddies, I bet you will approach the 100 point gain you are looking for. Chances are your lender is pulling an auto-enhanced FICO and I don't know how it behaves with baddies. I guess the same.

Steps for the baddies:

Mail GWs to whomever reports the AT&T baddie. And mail GWs to LVNV on the Cortrust debt if in fact LVNV is reporting $0. If it is Cortrust that reports, then my answer might be different pending its age in relation to your AAoA.

For LVNV and ERC, send both a DV. If they verify and you agree, then start mailing PFDs. Make sure you DV first.