topic Re: Strategy for paying off and increasing FICO in Personal Finance

Strategy for paying off and increasing FICO

Tito1183 — Thu, 03 Jan 2019 23:27:48 GMT

I have $7K that I’m going to use to pay off CCs that we’re used when we moved into our house in Feb 2018.

Looking to make the biggest impact on my scores and hopefully be able to qualify for a BT offer once they update for the remaining balance.

Most recent scores:
Equ FICO 8 - 594 (9/29/18)
TU FICO 8 - 571 (11/11/18)
Exp FICO 8 - 560 (12/22/18)

Disco - 3750/3800 24.99%
PP MC - 1950/2000 24.99%
Best Buy Visa 1000/1400 27.24%
AMEX ED - 999/1000 - 0% 7/21/19
AMEX Cash - 997/1000 24.99%
Wayfair - 666/2000 - 0% 2/22/19
Chase FU - 496/500 - 0% 2/25/19

Total Balances - 9,858
Total Limit - 11,700
Utilization - 87.66

Thanks in advance.

Re: Strategy for paying off and increasing FICO

Anonymous — Thu, 03 Jan 2019 23:22:21 GMT

Personally, I’d wipe out the biggest balances with the least wiggle room first. Disco, Amex Cash, and PayPal MC. Then I’d tackle the BB, Wayfair, Chase, and ED in that order. Other will say take care of the ones with the highest interest rate, that also is not a bad idea but I’d wanna see those bigger balances gone. It would make me feel better lol.

Re: Strategy for paying off and increasing FICO

HeavenOhio — Thu, 03 Jan 2019 23:23:16 GMT

I'd pay off Wayfair, Chase, AMEX Cash, Best Buy Visa, and PayPal Mastercard. Pay $111 toward the AMEX ED, then put the rest toward Discover.

Wayfair and Chase have 0% ending. It's valuable to be able to pay that off before the end of the promo period and save the bother of having to restore your grace period. The AMEX ED payment is simply to make the card no longer maxed.

Re: Strategy for paying off and increasing FICO

Anonymous — Thu, 03 Jan 2019 23:31:16 GMT

Yeah, that’s a good way of thinking too. That’s why I love MyFICO. So many people to give ideas others wouldn’t think of.

Heavenly is right, if I’m not mistaken, cards reporting maxed which is somewhere around 80% hold down your scores more.

Re: Strategy for paying off and increasing FICO

Anonymous — Thu, 03 Jan 2019 23:32:02 GMT

You have very good advice in this thread. If I were in your shoes, I'd pay the one's with the highest APR down first and the one's with the zero percent last.

Re: Strategy for paying off and increasing FICO

Anonymous — Fri, 04 Jan 2019 00:03:54 GMT

@Anonymous wrote:
You have very good advice in this thread. If I were in your shoes, I'd pay the one's with the highest APR down first and the one's with the zero percent last.

I agree with this, this will free up about $150 interest payments per month that can be used to further pay down the rest. I believe finances should come first, scores will follow sooner or later, you're very close to paying everything down without 3% BT fee.

Re: Strategy for paying off and increasing FICO

Anonymous — Fri, 04 Jan 2019 00:19:28 GMT

@Tito1183 wrote:
I have $7K that I’m going to use to pay off CCs that we’re used when we moved into our house in Feb 2018.

Looking to make the biggest impact on my scores and hopefully be able to qualify for a BT offer once they update for the remaining balance.

Most recent scores:
Equ FICO 8 - 594 (9/29/18)
TU FICO 8 - 571 (11/11/18)
Exp FICO 8 - 560 (12/22/18)

Disco - 3750/3800 24.99% 3200
PP MC - 1950/2000 24.99% 1650
Best Buy Visa 1000/1400 27.24% 600
AMEX ED - 999/1000 - 0% 7/21/19 100
AMEX Cash - 997/1000 24.99% 850
Wayfair - 666/2000 - 0% 2/22/19 200
Chase FU - 496/500 - 0% 2/25/19 400

Total Balances - 9,858
Total Limit - 11,700
Utilization - 87.66

Thanks in advance.

my suggestion, if you can find 400 more, pay more to BB, wayfair.

Re: Strategy for paying off and increasing FICO

HeavenOhio — Fri, 04 Jan 2019 00:37:52 GMT

@Anonymous wrote:
@Anonymous wrote:
You have very good advice in this thread. If I were in your shoes, I'd pay the one's with the highest APR down first and the one's with the zero percent last.
I agree with this, this will free up about $150 interest payments per month that can be used to further pay down the rest. I believe finances should come first, scores will follow sooner or later, you're very close to paying everything down without 3% BT fee.

As it turns out, three of the cards have the same rate. So it's a slam dunk to pay off Best Buy.

What's less of a slam dunk is my suggestion above to include Chase and Wayfair in this round of payments. But I think it's worth not turning on the interest spigot on those cards (along with not having to spend two statements resetting the grace period).

Re: Strategy for paying off and increasing FICO

SlideOrInsert — Sat, 05 Jan 2019 00:57:16 GMT

I would do this:

	debt	payment	balance
disco	3750	3750	0
ppmc	1950	1950	0
bbvisa	1000	303	697
amexed	999	0	999
amexcash	997	997	0
way	666	0	666
chase	496	0	496

that leaves 2858 total debt. with a 0 balance, my discover offers me a standing BT offer of 0%/12mo (3% fee). I would BT bbvisa+wayfair+chase (1859*3%=~$86). now you are paying no interest. you do not say what you can afford to pay ongoing, but dump in as much as you can to pay off the 0% amexed / 0% disco BT before the expiration.

if that BT offer is not an option, I would do this:

	debt	payment	balance
disco	3750	2387	1363
ppmc	1950	1950	0
bbvisa	1000	1000	0
amexed	999	0	999
amexcash	997	997	0
way	666	666	0
chase	496	0	496

you do not say what you can afford to pay ongoing, but pay the minimums to disco/amexed, make two months payments of $248 to chase to pay off chase by the expiration. then budget to pay whatever it takes to pay off amexed in time and dump everything else you can into disco.

Re: Strategy for paying off and increasing FICO

Tito1183 — Fri, 04 Jan 2019 01:27:25 GMT

Between all cards, minimum payments are $334. I can swing $500/mo in payments to bring down balances. Would that change your suggestion?

Re: Strategy for paying off and increasing FICO

SlideOrInsert — Fri, 04 Jan 2019 02:21:26 GMT

you could to this:

	debt	payment	balance
disco	3750	2351	1399
ppmc	1950	1950	0
bbvisa	1000	1000	0
amexed	999	0	999
amexcash	997	997	0
way	666	666	0
chase	496	36	460

I'm estimating so you might need to adjust the numbers a little, Jan/Feb pay the minimum to amexed, $230 to chase to pay off chase by the expiration, and the remainder to disco. Mar/Apr/May make the min for amexed and dump as much as you can into disco. Jun/Jul make the min to disco and pay off amexed. Then in another month or two you should be done.

either way, focus on paying off debt before fico/utilization.

Re: Strategy for paying off and increasing FICO

SouthJamaica — Fri, 04 Jan 2019 02:47:15 GMT

@Tito1183 wrote:
I have $7K that I’m going to use to pay off CCs that we’re used when we moved into our house in Feb 2018.

Looking to make the biggest impact on my scores and hopefully be able to qualify for a BT offer once they update for the remaining balance.

Most recent scores:
Equ FICO 8 - 594 (9/29/18)
TU FICO 8 - 571 (11/11/18)
Exp FICO 8 - 560 (12/22/18)

Disco - 3750/3800 24.99%
PP MC - 1950/2000 24.99%
Best Buy Visa 1000/1400 27.24%
AMEX ED - 999/1000 - 0% 7/21/19
AMEX Cash - 997/1000 24.99%
Wayfair - 666/2000 - 0% 2/22/19
Chase FU - 496/500 - 0% 2/25/19

Total Balances - 9,858
Total Limit - 11,700
Utilization - 87.66

Thanks in advance.

In such a maxed out state, I wouldn't concern myself with interest rates in the first instance.

I would pay everything down to 48%.

Then pay everything down to 28%.

Then concentrate on eliminating the highest interest rate accounts.

Re: Strategy for paying off and increasing FICO

Tito1183 — Fri, 04 Jan 2019 02:53:21 GMT

Will paying everything down to 48% and then 28% have a bigger impact than paying everything and leaving $2367.54 on Disco and the AMeX ED? Paying everything but those two, AMEX ED is at 0% for six more months will give me a utilization of 99% on AMEX ED and 62.30% Disco and overall utilization of 27.83%. Seems more efficient to only have two balances to tackle?

Re: Strategy for paying off and increasing FICO

SlideOrInsert — Fri, 04 Jan 2019 03:53:48 GMT

unless someone NEEDs to obtain financing in the next 6 months, do not PAY (interest) to chase a number (fico score). pay off debt with minimal interest, then manipulate your reporting balances to achieve your score.

but if util is that important consider this, at the end of Jan only one card will be card will be over 48%, and after Mar no cards but you will be paying interest on about $500 more from the previous schedule:

	debt	payment	balance	util
disco	3750	1836	1914	51
ppmc	1950	1950	0	0
bbvisa	1000	1000	0	0
amexed	999	515	484	48.4
amexcash	997	997	0	0
way	666	666	0	0
chase	496	36	460	92.7

consider this payment schedule with either scenario:

	disco	amexed	chase
jan	235	35	230
feb	235	35	230
mar	465	35
apr	465	35
may	465	35
jun	125	375
jul

Re: Strategy for paying off and increasing FICO

SouthJamaica — Fri, 04 Jan 2019 04:32:09 GMT

@Tito1183 wrote:
Will paying everything down to 48% and then 28% have a bigger impact than paying everything and leaving $2367.54 on Disco and the AMeX ED? Paying everything but those two, AMEX ED is at 0% for six more months will give me a utilization of 99% on AMEX ED and 62.30% Disco and overall utilization of 27.83%. Seems more efficient to only have two balances to tackle?

1. IMHO what I suggested will have the most impact.

2. Also, maxing out cards is a dangerous game; the sooner you get all of your cards out of that red flag zone, the safer you will be. In financial times like these you don't want to draw negative attention from your lender.

Re: Strategy for paying off and increasing FICO

xaximus — Fri, 04 Jan 2019 20:46:30 GMT

@SouthJamaica wrote:
@Tito1183 wrote:
Will paying everything down to 48% and then 28% have a bigger impact than paying everything and leaving $2367.54 on Disco and the AMeX ED? Paying everything but those two, AMEX ED is at 0% for six more months will give me a utilization of 99% on AMEX ED and 62.30% Disco and overall utilization of 27.83%. Seems more efficient to only have two balances to tackle?
1. IMHO what I suggested will have the most impact.

2. Also, maxing out cards is a dangerous game; the sooner you get all of your cards out of that red flag zone, the safer you will be. In financial times like these you don't want to draw negative attention from your lender.

I second @SouthJamaica is saying. In today's times, lenders are tightening up their purse strings. Best thing would be to pay down each card to under 48%, then down to 28%, then pay off each with the highest APR and continue forward. The last thing OP would need is CLD/AA. That would be my suggestion/advise.