Which route to take?

[buster126]

Good afternoon everyone,

My wife and I are looking to get out of our CC debt as well as refinance our home to lower monthly payments. Original plan was to refi to take advantage of the lower apr and take out some money in order to clear up the CCs. Never missed a payment, great credit history, diverse types of cards, income is 145K,  Problem is that my credit score has taken a hit due to the high amount of utilization that we currently have (around 77%). EQ-700, TU-707, EX-700. The target number given by the refi officer was 740. That's where I'm trying to get back to within the next 4-6 months. My wife had been handling the finances for years and I blindly sat by trusting her decisions. Now that I've taken full reigns of the finances, I'm trying to decide which route is the best to take for my situation.

With a refi being off the table for now, here's what I've come up with.........

1. Attempt to take advantage of current BT deals with either Discover/Citibank/CapitolOne/Anyone Else? Most of our CC debt is with AMEX and Chase so they're off the table. I'd be looking to BT at least 8K and a lot more if even possible. We do have a total of around 27K on our CCs but the 8K is essential to be BT. I like this option the best but am hesitant to apply for fear that I might not be given enough of a CL to BT what I need to and also the hit I will take for the future refi. Would it be terrible to apply for say both the Discover AND Citi cards back to back in hopes of getting enough CL to BT the 8K between both? I'm leaning about 75% towards doing it this way. 

2. Attempt to take a debt consolidation loan. I've seen rates at just over 9% and though they seem intriguing, however my friend in finance said that this should be the final avenue to explore. I'm in this at about 24%

3. Sell off my house and cars and live in a cardboard box while being 100% debt free. I'm 1% invested in this idea. Lol.

Thanks for any advice.............  

[HoldingOntoHope]

I don't know why your loan officer is telling you that you need a 740 score to refinance. I understand conventional loans vary their interest rate by credit score but I think you should check with a broker as to what you could currently qualify for. As to requesting a new card for a balance transfer I know that Citi cards normally have some pretty decent 0% for 18 month offers. And Discover is offering at least 12 months at 0% right now. I would probably apply for one or the other and see what the assigned credit limit is. I know with the Citi application you can put balance transfer requests in as a part of the application process. I don't know if that influences the assigned credit limit or not.

As to your third option I would at least go with a tin shed instead of a cardboard box. It provides a little better shelter and with your income I think you could splurge and afford it. You may want to consider tracking all your spending for a month or two and see if there are areas you could cut back some and reassign the money to debt payoff. 27K may seem high but it is far from insurmountable in your circumstances.

[bettercreditguy1]

While your LO is probably correct for getting you the pest possible rate, loans at higher interest rates are available. You will probably want to get to 720 if possible. However, to get there you need to get your utilization down. I'm not certain, my thinking is you may not get anywhere the new cl you need to make a BT work for you with your current utilization. You look like high risk right now.   My suggestion would be  to cut all non essential expenses, and apply all of that money to your cc debt. It appears your debt accumulated over time and it wil take time to reduce it. If you impulse spend using cc's to float, then put your cc's in the freezer so you can not readily use them thus forcing you to live on the cash in your pocket. As always, ymmv. Good luck.

[buster126]

Thank you for all the helpful info. I'm sooooo zoned in on handling this, it's consuming me. Lol. Another question if I may, I just paid off my Macys ($800) and 1st Premier ($400) today and paid ($1500) on my Chase card. I would think that either Discover or Citi would look more favorably at me for approval with having lowered my utilization and with 2 cards now paid off completely. I just don't know how long before thier able to view the pay downs on my report? Should it not appear by the time I apply, is it plausable to send them statements reflecting the paid balances or something else of that nature? I know a rapid rescore is able to be requested in regards to home loans, but I'm not sure if that's on the table with the CC companies. Thanks again!!!

[HoldingOntoHope]

You can look at your accounts and find the statement dates. That is the date that they will report the paydown to the credit bureaus. It will then take from 1 - 5 days for the information to actually fully update on your credit reports. That is why a lot of people on here maintain monitoring services that allow them to check their credit reports daily, especially during a period of focusing on changes and updates.

The credit card companies will not consider any statements or information you provide that is outside of their own credit pull. And there is no rapid rescore option available to the average consumer outside of the mortgage process. So you will be stuck waiting for the info to update. There is a lot of discussion on these boards regarding calling in to the credit card companies for reconsideration (recon) if your application is denied and / or you do not get the credit limit you would like. Citi I'm not sure about but Discover is a tough one to recon unless you can prove that the information they received and denied you for is not valid in some way. I would suggest waiting until you are sure that you are presenting the best possible report before making the applications.