I need some advice. My most recent EQ fico score is firmly sitting at 597. I know that the biggest factor is that I have an old, charged off Amex that is contributing to my utilization. Your opinion on which option I should prioritize:
1.) auto loan - sub-prime financing at ~18%. 36 months in on a 72 month loan - approx $16k remaining. Currently paying ~$500/mo
2.) Amex - original balance (08/2011) was almost $19k - currently about $14.5k.Paying $250/mo+
Kind of a "rock and a hard place" situation, in my opinion. The Amex is causing my credit utilization to be well over 80%. I'm aware that at my current rate of pay, it will be a while before I pay it off, or at least down to the point where the utilization is not negatively affecting my score. Amex offered me a settlement last year, but also offered the rebuilder program with a $5k limit once the balance is paid off - trying to put my irresponsible past behind me and regain Amex membership, rather than be forever blackballed, I opted to pay it off.
The way I see it - despite the awful APR on the auto loan, I have never been late and it should be positively affecting my credit. The negative equity on a car that I drive 30k miles per year is hard to swallow though. The Amex is not accruing interest. I, unfortunately, cannot refinance and/or buy a new car until my credit score is improved, and it is clear that the Amex is by far myworst lingering baddie.
Any input?
(please pardon any grammar errors - typing on my iPad and editing options are limited)
Starting Score (08/22/11): TU: 510 / EQ: 512I should add that the SW calculators project my score to be in the 670-700 range once the Amex is paid off.
Amex was originally a Blue. My oldest form of credit (opened in 2000, my first year of college)
Started out as a $500 or $1000 credit limit. After paying it off and forgetting that I had it for about 4 years, they sent me a new card and increased the CL to around $5k. After responsibly using it for a few months, they increased it again to $15,200. This is the CL that is reporting - current balance is about $14.5k (in addition to the $2500 or so in credit that I regularly use for work travel, getting reimbursed weekly - mostly paying this in full monthly).
Definitely way more than I was able to handle at the time, being a 20 something, in college and working full time. I used it irresponsibly,even using one of the provided checks to pay off a remaining loan balance of $3-4k.
Fell behind on payments and it eventually got charged off. Never got handed off to a CA - Amex kept it in house and has been working with me since last August to pay down the balance. It is reporting to all 3 credit bureaus monthly.
Thanks. That is my thought as well.
I started a new job in May of this year and should start making $3-4k/mo in commission within the next couple of months. I intend to dedicate as much of that as possible to Amex to expedite the payoff. At the very least, I'd like to start sending $1000/mo in an effort to be done with itnay the end of 2013 and hopefully being well into the 700s.