Digging out from large # of cards/high % of balances used - best strategies anyone?

[Pegasustoo]

Like so many others, I went through a divorce several years ago out of which I assumed huge debt and am making significant progress paying down various credit lines. I just paid off 2 high rate car loans and one high rate/small balance credit card, which of course will be left open for scoring purposes. I do have a mortgage in good standing. Here are the challenges:

I have 3 unsecured cards which were put on payment plan and closed by the lender that I am now making timely payments on with balances of $6000, $1700 and $1000. 2 Citicard and 1 Chase. The bummer is that no matter how far I pay these 3 accounts down they still show as 100% credit utilization on my report. Can I appeal with any hope of success to have these cards reported at their original credit limit to improve the utilization ratio?

I also have 4 active unsecured cards in good standing with balances of $7600, $3200, $410 and $850. Amazingly, this is a significant improvement from where it was! The $850 is a fee-based card with a high rate and will be paid off and closed ASAP, regardless of score impact. I hate fees. I successfully raised the credit limit on the $410 card to improve the Utilization Ratio.The others have Credit Utilization ratios ranging from about 40% up to 90%. What are the threshold ratios (70%, 50% and 10% are ones that I've heard) at which the FICO score may improve? I believe my strategy is best to get them all uniformly under a given threshold (optimally 10%) rather than pay off any one card. Am I correct in this strategy?

I also have 1 active/unsecured card and 1 consumer card which are paid in full. Does the consumer card ding my score even with a zero balance? Given the large number of credit lines in play, after closing the fee-based card am I still better off leaving all lines open with zero/very small balances? What I am asking is if there is an "Optimal" # of active accounts? I plan to refi all remaining debt via a 401K loan in the next 12 months to clean the slate. Better to pay myself a small %rate vs. paying someone else a large %rate, I figure.

Thanks in advance for any and all input!

[Shogun]

The ones that are at 100% util will continue to show the same util because they are closed.  

[Shogun]

Keep paying those cards down, garden what you have, time will heal.  Once the bad debts are paid, try GWs to remove.  You're heading in the right direction.

[EW800]

I am not sure that I have a lot to offer, but will say that my wife and I went through so very rough waters financially for a while, following a foreclosure and high credit card debt.  Once the foreclosure was done, we made the decision to make very significant cuts in spending and basically lived on rice and beans (so to speak) for close to two years.  We took everything we "saved" and gave it to the credit card companies.  It was a painful couple of years, but it worked.  We were able to get our UNTIL down to about 3-4%.  All cards are paid off, other than a bit left on CareCredit (0%) for a medical procedure.  

Not sure what your current situation is financially, however I would just say if possible cut back on everything you can and try to pay down the debt.  It does take a while and comes with some pain, but if the income is there, it can be done.  I found that by pecking away at the debt and paying everything on time from your starting point, credit scores can actually rebound a bit quicker than I thought.  

You have come to the right forum.  A lot of VERY friendly people here who are extremely supportive.  

Best wishes.  

[wa3more]

I think what Shogun said is the what you need to do. Keep it up and GW later. You will have good chance with GW if these are PIF.

[Pegasustoo]

Shogun/wa3more,

What are you referring to with GW's? Please elaborate. Thx

[wa3more]

GW is a good will letter to the creditor asking for some help with the items on your credit report you want to clean up.

If an account is paid in full , they may agree to delete small things like 30 day late. Major creditors like Chaser are reluctant to do GW's because they will say they must report accurately.

The key with the good will letters is being honest, tell the creditor what happened , that you sinned and you are looking to clean up things so you can move on.

Settled accounts may be more diificult to ask for good will adjustments.

[Shogun]

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@wa3more wrote:

GW is a good will letter to the creditor asking for some help with the items on your credit report you want to clean up.

If an account is paid in full , they may agree to delete small things like 30 day late. Major creditors like Chaser are reluctant to do GW's because they will say they must report accurately.

The key with the good will letters is being honest, tell the creditor what happened , that you sinned and you are looking to clean up things so you can move on.

Settled accounts may be more diificult to ask for good will adjustments.

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+1

It's different for everyone.  Some have good success with PFDs, some with GWs.  When I was rebuilding, I had no success with PFDs, but great success with asking for GWs after those debts were paid/settled.