Ok I wrote about this in another section (Understanding Credit), but it also applies to rebuilding so I'd like to post it here for some advice. Sorry if I shouldn't have posted here mods.
Ok, I've got about 1800 dollars to put on my CC's. I've got 7 CC's, 5 carrying a balance. Overall UTI is extremely high (above 80%). I've figured I have 2 options. I will list them below in detail. Any help is appreciated. I'm trying to get a home loan in Septemer/October and need the points to qualify for a VA mortgage.
Here is a list of my CC's
Cap 1- Balance- $288. Limit- $300. UTI 96%
Cap 1- Balance- $458. Limit- $500. UTI 92%
HSBC- Balance- $293. Limit- $300. UTI 98%
Military Star- Balance- $775. Limit- $840. UTI 92%
Military TIHT- Balance- $2681. Limit- $3150. UTI 85%
JC Penny- Balance- $0. Limit $200. UTI 0%
Walamrt- Balance- $0. Limit $100. UTI 0%
First Premier Bank (Charge OFF 7/2007)- Balance- $411. Limit $250. UTI 164%
Ideally I want to settle with FPB so that will not be a factor in UTI. the below options aren't counting FPB.
Ok I can do one of 2 things.
option 1.) Pay off both Cap 1 cards, HSBC card, and Military Star card. This would give me 6 card with a $0 balance, one card at 85% UTI. Overall UTI would be 49.7%.
option 2.) Pay down all cards to 49% UTI (all would still have a balance).
Thoughts? Other ideas?
Thank you for your time.
In my opinion I vote on option 1....
Fico scores take into consideration total util on each individual card as well as the total util on all cards.
If you pay off 6 cards in full leaving a 0 balance and only having 1 card with a balance will give you a better score in my opinion. The goal would be to also lower that last card to ultimately be under 9% util.
The charge off is not helping and I would pay this off as soon as you could also.
Possibly instead of paying off the $458 dollar Cap One card pay off the charge off 1st. Use $411 to pay off charge off and put the left over $47 on top of your minimum payment to Cap One.
Also make sure you pay all minimum payments on any card you are not paying off. If you miss the minimum payment due this will cause you another set back.
Edited to fix bad typing with numbers...
what are the interest rates of the cards you are carrying balances? I would worry about paying the highest rates off first, the FICO score issues will take care of itself in due time.