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Please help me figure this out!

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RW771
Frequent Contributor

Please help me figure this out!

Good morning all,

 

I posted in the CC forum a few weeks ago regarding this but didn't really get the answer I'm looking for. I'm not sure if this is the right place to post this either, but seems to be the best place that fits.

 

According to my most recent SW alert, my FICO score is 654. All of my accounts are in good standing, I have no  lates, and just 1 paid medical collection that will fall off next year sometime (no amount of GW'ing will get them to delete). I can't seem to get my score to go up, and I know it's due to the high utilization of my CC's. I'm trying to come up with a plan in order to help me pay them down, but some of them have high int. rates, so I feel like it will take me forever to get them paid off. Here is what I currently have:

 

Visa Platinum (through my CU): $5,986/6K limit @ 8%

Chase Freedom: $1714/3K limit @ 22.9%

Home Depot: $2854/3K limit @ 22.9%

Kohl's: $120/200 limit

David's Bridal: $741/$2300 limit

Furniture store card: $0/3.4 K limit

 

So if I figured this up correctly, I'm currently utilizing $11,417 of my $14,450 total limit, or 79%. I just finished paying off the furniture store card and will have the David's Bridal card paid off by Oct. I'm hoping to have the Chase Freedom card paid off after that, hoping to pay it off within the next few months as well. I wanted to find another CC that I would qualify for with 0% int. for at least 6 mos (hoping for 12 mos) in order to roll over the balances on the Chase and Home Depot cards. I know for a fact I could pay those off much, much faster but don't think I would qualify for another card given the above? Any suggestions on what would be the best thing I could do to tackle some of this debt? I know that once I start paying these balances down I will see my score increase, but not so much worried about my scor as I am getting these suckers paid down. Please help!!

05/31/2013 672 EQ (Fico), 03/08/2012 697 TU (Fico)

Closed on my first home 12/07/11! Officially a homeowner, thanks to this forum!!!

Message 1 of 8
7 REPLIES 7
jeffriesde
Valued Member

Re: Please help me figure this out!

Is the David's Bridal account a revolving account or Installment?  

 

If it is not revolving then it would not be factored into Util.  If it is revolving then knocking it out along with the Kohl's card would put you a 50% of your cards reporting a 0 balance.  Fico likes to see 50% or more of your cards reporting a 0 balance.

 

This may give you a small bump but YMMV.


Starting Score: EQ 549 (5/2012) | TU 594 (7/2012)
Current Score: EQ 618 (9/2012 Lender Pull) | TU 648 (9/2012 Lender Pull) | EX 599 (9/4/2012 Lender Pull)
Goal Score: 700


Take the FICO Fitness Challenge
Message 2 of 8
RW771
Frequent Contributor

Re: Please help me figure this out!


@jeffriesde wrote:

Is the David's Bridal account a revolving account or Installment?  

 

If it is not revolving then it would not be factored into Util.  If it is revolving then knocking it out along with the Kohl's card would put you a 50% of your cards reporting a 0 balance.  Fico likes to see 50% or more of your cards reporting a 0 balance.

 

This may give you a small bump but YMMV.


The David's Bridal account is a revolving acct (CC). I'm paying it off since the 0% int. period ends this month and think I will pay off the Kohl's card just to see if it will help any. I've actually thought about closing out the Kohl's card since they haven't given me an increase in 4 years and $200 CL is almost a joke lol. Thanks for the input, I'll see what paying those 2 off does.

05/31/2013 672 EQ (Fico), 03/08/2012 697 TU (Fico)

Closed on my first home 12/07/11! Officially a homeowner, thanks to this forum!!!

Message 3 of 8
apandabear
Regular Contributor

Re: Please help me figure this out!

If it helps motivate you at all, the more CCs you have report with a balance, the more you are penalized. Paying off the balance on the Kohl's card might help more than you think. 

 

A couple ways you can tackle it:

 

Go after the smallest balances first. Try to have as few cards as possible reporting any balance. You'll only want 1 (in the end) to report a balance.

You have two cards maxed out (Visa Platinum  $5,986/6K - 99.7% and Home Depot: $2854/3K - 95%). Get those to AT LEAST under 90%. Under 80% might be better. 

 

Ideally, you want all cards except 1 to report $0 balance. The card that you let report a balance should report less than 10%. But in the meantime, there are a couple strategies to maximize your score without spending $10k at once.

 

If you're worried about paying down the debt, common wisdom is to either A) snowball -- pay the smallest balances first (mentioned above) so you see immediate progress, or B) tackle the higher interest cards first, to save you $$ in the end. 

 

It's up to you. Try to pay off some of this first, before you apply for new credit. You might see some big point gains by strategically paying some of this off.

2009-10 - C/Os
2011 - Debts paid, no open credit
2012 - Rebuilding started, secured cards opened, SL rehabbed - EQ myFICO 636
2014 - 10k Discover, 3.5k Freedom, AmEx Green, SL, Auto Loan - EQ myFICO 695
Message 4 of 8
bettercreditguy1
Established Contributor

Re: Please help me figure this out!

You can use either strategy. Pay smallest accounts off first, then start on the larger accounts or reverse. You probably will not be able to qualify for another major cc with your high utilization. So it would be better to sit tight, and pay off what you have using either strategy.

Updated scores 3/7/21 TU 849, EQ 829, Ex 818 (all Fico scores) Remember the Three P's: Pay early in Full, Pay on Time, Patience
Message 5 of 8
Autumnslight
Frequent Contributor

Re: Please help me figure this out!

For an immediate boost, get every card under 90%, and keep them there. Then work on zeroing out other cards. I personally like to start with any very small balances, then go on to the ones with the highest interest rates.

Scores:
07/29/12: EX FICO (Amex) 684 | EQ MyFICO 631 | TU Walmart 695
Current: EX FICO (MyFICO) 733 | EQ (MyFICO) 683 | TU (Walmart) 745

First Goal: 700+ across the board - Got it on EX & TU!!!
Message 6 of 8
GregB
Valued Contributor

Re: Please help me figure this out!

I'm assuming that you don't have several other revolving accounts with $0 balance........

 

When a lender looks at your current credit report they are going to assume that you are spending way too much before you make it and will eventually blow up financially. Some lenders may be willing to try to get something out of you before you fail but that is a very different loan than a 0% temporary rate with the hope of getting more interest later.

 

What is going to really concern them is that you are paying insane interest on most of your accounts. The only one that is reasonable interest at 8% is maxxed out - 99.76%.

 

If the Kohl's is not just last month purchases that your are about to PIF, then pay that off ASAP. I would get all the others below 80% ASAP, with the Visa maybe last. I would get it down a bit below maxxed out.

 

If you are willing to pay 22.9% interest on that much money, you are probably headed for disaster. Good to see you are paying attention to the interest rates and realize they need to be paid off.

Message 7 of 8
jamie123
Valued Contributor

Re: Please help me figure this out!

First off, you need to take ALL these credit cards and put them in your sock drawer NOW! You must immediately stop using any type of credit until you get this under control. You might not see it, but when we look at your debt we CLEARLY see that you have been living above your means. You have been financing a lifestyle that you cannot afford.

 

These are my suggestions:

 

1. Make minimum payments on everything and split any extra money you have and pay the Visa Platinum and Home Depot under 90%. Then....

 

2. Make minimum payments on everything and pay the Kohl's off.

 

3. Make minimum payments on everything and pay of David's Bridal.

 

4. Make minimum payments on the Visa Platinum and split your extra money and pay off Chase and Home Depot.

 

5. Pay off the Visa Platinum CU card.

 

If you have an extra $1000 a month this will take you 1 year to accomplish.

 

Please don't take me the wrong way, but you are currently exhibiting really bad credit behavior. It will not be easy to change this behavior, but you must do it or your lenders will do it for you. Running up your balances so close to your credit lines is sending a RED ALERT to your lenders. They are probably keeping a close eye on you at this point. If you applied for a new card right now you would be denied.

 

You have come to this forum at the right time. You are not in trouble yet but you need to get a handle on it.

 

If you follow my advice, your scores will probably be somewhere around 720 to 760 when you are done. Your scores will take off like a rocket as you pay this debt down.

 

Okay....That was the serious answer.....

 

Now for the other one....

 

You could always get a second job, it would give you extra money to pay down your debts AND you wouldn't have as much time to go shopping!Smiley Wink


Starting Score: EQ 653 6/21/12
Current Score: EQ 817 3/10/20 - EX 820 3/13/20 - TU 825 3/03/20
Message 8 of 8
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