How to raise score with high debt to income?

[E78K]

I originally posted this under the CC forum.  I am reposting here as this is a more accurate forum.

* If the answer is just to pay down the debt, please do not respond with that suggestion as it is what I am doing now.  I am just looking to see if another option will help as paying down will take a few years to improve my score.  Note that I can make a few dollars above minimum payments.

A few years back I was advised, ' to close credit cards and work off one or two as this will increase your score'  as we all know that was dumb advice.  My debt to income is now destroyed.  My score went from 760s to around 625.

The only bad issues I have:

1. 60 day hit for missing payment back in 2010, this was paid in full.

2. I set up a payoff on an old car lease in 2010.  Not realizing how it would affect my credit. I have since paid it in full as of 2011.

My cards:

NFCU card Limit 20k owe 16 k

USAA 16k owe 12k

1.  Consolidate with a loan, BTW my house appraised for 10k less than what I owe so home equity is not applicable.

2. Take one day and as mentioned on this site, apply for a bunch of cards in order to increase my available credit.  I assume I will be denied for most cards and will have to try and request reconsideration of the application.  Therefore I can hope to decrease the debt to income and boost my credit after the inquiries etc.. Come off the report.

I already own a home and car so I do not need to do any of those in at least the next 12 months.  However, I would like to take actions to raise my score if I can.  So that is why I wanted to see if spending that 'day' applying would be helpful as the history of hard pulls would be gone prior to my next car etc... 

[DaBears]

Hi E78K and welcome to the forums. You are consider by Fico scoring as almost maxed out on your credit cards which will significantly lower your scores. If you can get your UTIL % down to 40% that would help. Ideally you want one of those cards reporting a $0 bal and the other between 1-9% UTIL you can also rotate them every other month. Fico has no memory of what you are using during the month only what is reported to the CRA's each month (snap shot) 

[Anonnamus]

Getting that late removed would be a good score booster. Have you tried sending a GW (goodwill letter)?

Edit: That may have been dumb advice. I don't know that you can GW a late? Either way, have you tried talking to them about possibly removing the late from your CR?

[Shogun]

I believe I understand what you are asking.  You want to know if by adding new lines of credit and increasing your available credit, thereby lowering your util would raise your scores.  Yes it would, but I'm not sure if you would qualify for the new cards.

You say you don't plan on any major purchases within 6 months, so the HPs wouldn't really matter much.  So why not give it a try.  I would post over in our CC boards and see what they advise for you to try and apply for.

[Shogun]

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@Anonnamus wrote:
Getting that late removed would be a good score booster. Have you tried sending a GW (goodwill letter)?

Edit: That may have been dumb advice. I don't know that you can GW a late? Either way, have you tried talking to them about possibly removing the late from your CR?

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That was not dumb advise, you can GW a late off.  

[tld409]

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@E78K wrote:

I originally posted this under the CC forum.  I am reposting here as this is a more accurate forum.

* If the answer is just to pay down the debt, please do not respond with that suggestion as it is what I am doing now.  I am just looking to see if another option will help as paying down will take a few years to improve my score.  Note that I can make a few dollars above minimum payments.

A few years back I was advised, ' to close credit cards and work off one or two as this will increase your score'  as we all know that was dumb advice.  My debt to income is now destroyed.  My score went from 760s to around 625.

The only bad issues I have:

1. 60 day hit for missing payment back in 2010, this was paid in full.

2. I set up a payoff on an old car lease in 2010.  Not realizing how it would affect my credit. I have since paid it in full as of 2011.

My cards:

NFCU card Limit 20k owe 16 k

USAA 16k owe 12k

1.  Consolidate with a loan, BTW my house appraised for 10k less than what I owe so home equity is not applicable.

2. Take one day and as mentioned on this site, apply for a bunch of cards in order to increase my available credit.  I assume I will be denied for most cards and will have to try and request reconsideration of the application.  Therefore I can hope to decrease the debt to income and boost my credit after the inquiries etc.. Come off the report.

I already own a home and car so I do not need to do any of those in at least the next 12 months.  However, I would like to take actions to raise my score if I can.  So that is why I wanted to see if spending that 'day' applying would be helpful as the history of hard pulls would be gone prior to my next car etc... 

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I would try and get a personal loan from NFCU since you are already a member.  I'm not a member of that credit union but, I got a personal loan from my credit union to payoff several credit cards and this helped my scores significantly.  You just have to be careful not to charge up cards again while paying off loan.  Plus it is much easier to pay off a single loan vs multiple cards- at least in my case

[RobertEG]

In my opinion, the ideal course would be to obtain a loan that (a) has a lower APR than your current CCs, and that is either (b) a revolving line of credit that does not report to the CRAs or (c) is an installment loan.

Revolving debt is weighted MUCH higher in scoring that balance owed on installment loans, and thus shifting the debt to installment will produce a significant reduction in revolving debt to credit limit.