Mom's tied by credit. Trying to help her out.

[BM3]

A month on this forum and I learned so much I feel i must try help my mom with her credit situation. Would very much appreciate a second look for a plan of action.

Her data:

Experian 682 (creditscorecheck report)

TU 685 (barclays report)

7 years avg account age.

2 inqs in 2016 only.

100% on time payments 

Loans:

Wells fargo car loan - 64% paid, 7k/20k 4.99%  APR 

Lending club - 34% paid off, 4k/6k  15% APR

Credit cards:

Discover Bank $6,480 / $6,500 24.24%

Capital One Biz Card $1,757 / $1,750 20%

Capital One $2,226 / $2,250 21%

Barclays $6,920 / $7,000 - 26.24%

Citicards Cbna $972 / $1,000 0% (but was charged $10.7 interest to standard purchase)

Kohls/Capital One  $145 /1000

best buy/CBNA 0/1000

Victoria secret 0/700

SYNCB/CARE CREDIT 0/3500   0% APR

closed:

5 accounts

 Barclays TU and creditscorecheck EX show $18500 owed 75% UTIL but FAKO CK scores show the closed accounts and list 44%. Do I follow the 75% then?

BANKRUPCY. ch7   January 10, 2009 (aka the American dream. Don't want to get too personal here but coming as an immigrant, marrying into the American good life, living in a nice house, and then suddenly having to file a BK when you realize your husband was financing it with CC for a few years.) To give some clarity on why this debt again is high, some silly spending yes, but overall it's major dental work that's is ongoing and will need another $1200 very soon, and $10,000 later this year. Yikes. 

Her income, is about 2.5k a month. I'm also guessing with her expenses and fees she can pay only min payments, and maybe 1.1x-1.3x min payment  on one card, if that.

Here's what I was thinking, but i've only been here a month so please advise:

First, get cards under 90% so she can actually get new cards with lower APR to roll these into. Looking at the numbers she needs to pay $2100 across those cards. I don't know how she's going to do that. That SYNCB/CARE CREDIT 0/3500 apparently has an agreement with her that she can only spend that money on dental or music instruments (her job). Anyone knows if there are ways around this?

Second thing is to get CLI's from what she currently has. Which ones does she try? 

SCT - will anyone give decent limits in this situation, and would max'd cards prevent from SCT even working?

Should she get a loan to pay down to 89%, and try for lower APR cards?

Curious to hear pay off strategies and advice from members here, cheers.

[Anonymous]

I will start with what I assume the majority is thinking. Mom may have been a victim in the first BK, but she clearly didn't learn the lesson. IMO she is going to have a very difficult time if she doesn't get on top of this because another major default on top of her past is going to forever blacklist her.

No one in there right mind is going to give her any CLI when she is maxed out AND has a not to long ago BK. It would be suicidal. Get all util under 50% would have to happen to even open up talk lines. Best is paying off the low balances to zero and keep knocking them off one by one. Cut her expenses down. No shopping, no eating out, find cheaper place to live, cheap car with no payment if applicable, etc. Once you get down a ways you may be able to apply for a consolidation loan. Some one *might* consider it now but they would require (especially now) that all cards be closed to do it so she could not rack up more debt after. I would not do another bk. And she has to learn how to balance her budget.

[BM3]

Thank you Amiblue for the reply and advice.  So is open lines at 0 more important than less than 90% util on a card?  Can people get CLI/new credit at 89%, or is it a different number? What about SCT, are the rules different? I just tried Ooverstock just to see if it'll pop up, it did. So credit score is fine, but got the 10 day review since I'm guessing max is triggering it. One thing my mom believes is that store cards don't matter - "they're not checked for credit"  Just double checking because I'm sure they DO. Should she pay the khols one then first, or go after CC lowest card?

She tells me she gets lending club offers for a loan- so maybe take 2 grand there and go to 89% if she can?

The good news is her income has gone up from what I guessed, so once diligence is applied things can begin to go better.

[Anonymous]

Showing less than 8.9% util is best. Having 1/3 of your rotating credit (so 1 card out of three, 2 out of 6) having a low balance under the 8.9% with all others at zero is best for everything. Anything over 87% util is considered maxed out. Store cards do count as do all other forms of credit. The loans would be predatory and I recommend you stop applying for things as HP's count against you and also hurt. Pay off the low balances, and keep taking out the next lowest while paying min on the other accounts. How many inquiries does she have now?

[BM3]

2 from 2016. 

[BM3]

bump

[DollyLama]

My biggest concern for your Mom right now is Adverse Action. It doesn't matter if she is making timely payments and only the minimum. She is at 100% utilization on 5 cards. They most likely will either balance chase her (decrease her line of credit say with every $100 reduction, or closed the account all together), either way, it will severly impact her scores, as a closed account will run over 100% utilization until paid in full. 

I would not even think of asking for any CLIs on these cards till they were individually and aggregate at 30% or below. 

I don't understand why SCT like Overstock would help, your only trying to get the aggregate utilization down? But the open creditors that are maxxed out and each and every month running a high balance defeats the purpose. 

She needs major reduction under 69% very soon, followed by <49% shortly thereafter on the maxed cards. 

Do you know her finances and monthly payments, what disposable income she might have? I'm guessing there is no savings, or she would not need $1200 soon for dental work. Any tax refund? How much longer does she have on her car payment? 

It's sad that she if had the utilization at optimal range, she most likely would be high 700s in score. Cheating herself out of points, and automatic CLIs, and then the reduced APR where they would do anything to keep her as a customer. 

Only you and she can sit down, and analyze things that can be done without, ie mani, pedis, eating out, dropping cable, depending upon where she lives, raising the thermostat a couple of degrees if summer or dropping it a couple degrees if winter. Learn when peak kwh rates are highest, and only do laundry/dishwasher on off times, always full loads I snap a picture of my meter weekly and gauge our usage. Showers are more expensive that a bath in water consumption. Unplug phantom electric, coffee pot when done, toasters, lamps, computers, they will still draw electric when not in use. Light bulbs- more expensive but the LEDs changed out from any incandenscent can reduce utilities. All the savings, 1- can be applied to her CCs, and 2- learn not to depend so much on energy. Needs to possibly shop consignment shops instead of buying retail. 

Opt her out of promos, she won't be tempted on offers that come in the mail. They go to many people, and all subject to credit approval, which I currently do not see her in a position of being prime for approvals, 

All I can advise, and I do not know how long the creditors will be like the high utilization, but 2x the min. payment on each CC (with exception of Kohls) could possibly help stave off any AA. Also sock drawer the cards so nothing can be charged and the balances decrease.