topic Re: Lowering utilization via increasing credit lines... in Credit Cards

Lowering utilization via increasing credit lines...

tcbofade — Wed, 31 May 2017 02:06:51 GMT

DW has mediocre credit scores. Mostly due to high utilization. (65% or so). I am in the process of making sure that no individual account reports over 89% as of 01 July. The only negative information on her credit reports should fall off in June. With nothing maxed out, no derogs, and no inquries in the last year (EX and EQ), one inquiry eight months ago on TU, what is her next step?

Do we try for CLIs on existing accounts, or apply for new accounts?

Seems to me that when requesting soft pull cli's, lenders tend to use dated credit reports, as opposed to pulling a fresh soft pull.

There are certainly lenders that will open new accounts for her in the mid 600s, but nothing better than what she has, so that seems wasteful and self defeating.

Short of winning the lottery, what's the best way (most likely to succeed = best way) to lower her utilization?

Ask for CLIs, or apply for new accounts?

Please and thank you.

Re: Lowering utilization via increasing credit lines...

jamesdwi — Wed, 31 May 2017 02:23:06 GMT

If she has accounts from Syncrony bank, Walmart store/MC card, Sam's Club, Lowes Hardware, she should deffiently call or chat and request a CLI, its a SP. and try any SP CLI's options she has availible to here, and pay down the high UTL cards. Don't apply for new cards or take any HP's yet. Do all the work you can to get the cards down and her score up. Then check out personal loan, if you can get her scores to the 700's, check out Marcus Loans by Goldman Sach's. They approved me for $30,000 with 5.99% interest. Loan companies are hyper sensitive to INQ's and new trade lines, and you raise your APR for any loan you do apply for.

Yes the 5.99% is more than 0% offers, but it feels better to do it once and be over than juggling BT's offers and moving them around, each time taking a 2-5% hit to move it to another card.

Also the two of you should take a look at why her UTL is so high, because if you don't work on fixing the cause, the situation will the same in 6 months, except the numbers will be higher.

Re: Lowering utilization via increasing credit lines...

tcbofade — Wed, 31 May 2017 02:32:37 GMT

@jamesdwi wrote:
If she has accounts from Syncrony bank, Walmart store/MC card, Sam's Club, Lowes Hardware, she should deffiently call or chat and request a CLI, its a SP. and try any SP CLI's options she has availible to here, and pay down the high UTL cards. Don't apply for new cards or take any HP's yet. Do all the work you can to get the cards down and her score up. Then check out personal loan, if you can get her scores to the 700's, check out Marcus Loans by Goldman Sach's. They approved me for $30,000 with 5.99% interest. Loan companies are hyper sensitive to INQ's and new trade lines, and you raise your APR for any loan you do apply for.

Yes the 5.99% is more than 0% offers, but it feels better to do it once and be over than juggling BT's offers and moving them around, each time taking a 2-5% hit to move it to another card.

Also the two of you should take a look at why her UTL is so high, because if you don't work on fixing the cause, the situation will the same in 6 months, except the numbers will be higher.

Thank you, James. Actually, the two causes fixed themselves some time ago...we ARE making progress, and her utilization is DOWN to 65%....lol...

She's got a dozen or so "soft pull CLI" accounts... walmart, lowes, capone (x3), but when she requests CLI's, they use the last report that they have on file... 30, 60, or 90 days old. Do you think if she asks via chat that they'll pull a fresh report?

Re: Lowering utilization via increasing credit lines...

jamesdwi — Wed, 31 May 2017 02:41:37 GMT

Congradulations on figure it out and paying it down, I have also came to the same place. I paid about $7,000 down before I took out the loan, 65% UTL is a bit high, i was only at 16% UTL, see my post http://ficoforums.myfico.com/t5/Personal-Finance/Marcus-Loan-Scarily-simple/m-p/4959442#M17204 for more details.

Re: Lowering utilization via increasing credit lines...

SouthJamaica — Wed, 31 May 2017 02:54:54 GMT

@tcbofade wrote:
DW has mediocre credit scores. Mostly due to high utilization. (65% or so). I am in the process of making sure that no individual account reports over 89% as of 01 July. The only negative information on her credit reports should fall off in June. With nothing maxed out, no derogs, and no inquries in the last year (EX and EQ), one inquiry eight months ago on TU, what is her next step?

Do we try for CLIs on existing accounts, or apply for new accounts?

Seems to me that when requesting soft pull cli's, lenders tend to use dated credit reports, as opposed to pulling a fresh soft pull.

There are certainly lenders that will open new accounts for her in the mid 600s, but nothing better than what she has, so that seems wasteful and self defeating.

Short of winning the lottery, what's the best way (most likely to succeed = best way) to lower her utilization?

Ask for CLIs, or apply for new accounts?

Please and thank you.

You shouldn't apply for new accounts.

There's no harm in asking for soft pull CLI's but I don't think she's going to get them.

The only real way to decrease her utilization is to pay stuff down.

Re: Lowering utilization via increasing credit lines...

Anonymous — Wed, 31 May 2017 03:08:50 GMT

Applying for (and receiving) new credit and obtaining CLIs is something that should be done when you're at 29% or less utilization. Can it be done above that number? Sure, but with far less favorable results and results that grow increasingly less favorable as utilization increases. At 65% utilization, there aren't may lenders out there that would easily hand over new credit and it's doubtful that any really would extend additional credit, as the "red flag" has already been raised.

As SJ indicated above, paying down that utilization is the next step and what really needs to be done before CLIs and/or new credit can be obtained.

Re: Lowering utilization via increasing credit lines...

Revelate — Wed, 31 May 2017 03:34:10 GMT

Hey T,

If you have some non-trivial lines which I suspect you do given how long both of us have been on this forum, why not add her as an AU to one or two and see if they count (FICO 8, they will on older models and there's plenty of CU's pulling those) and therefore dumps her revolving utilization down as it's almost always faster to shed CC debt with a higher credit score... simply more options.

Re: Lowering utilization via increasing credit lines...

happypill — Wed, 31 May 2017 03:58:04 GMT

If it is purely for the sake of utilization and scores are in the mid 600s, then some some SP SCT store cards could be useful.

Before people freak out because and overreact, yes paying down is the best strategy but that doesn't seem possible in the near term. Yes, getting a lot of store cards is a bad idea. Yes, getting SP CLI on existing cards is much better.

Ok, with all that understood, if utilization is the primary concern here, SCT cards could help. Some can be obtained without any HP at all and many offer SP CLI at regular intervals. Lot's of people have gotten over $30k on a Barney's card, and it's not hard to get to $10k+ on a lot of other cards. Don't know if the procedure has changed recently, but it should be quite simple.

Obviously, don't actually buy anything with the store cards and have a strategy in place to pay down existing debt. If you're not going to come up with a plan and follow it, then don't do anything as you'll only make things worse by creating temptation. As they say, once you notice you're in a hole, stop digging.

Re: Lowering utilization via increasing credit lines...

elim — Wed, 31 May 2017 04:15:55 GMT

@Revelate wrote:
Hey T,

If you have some non-trivial lines which I suspect you do given how long both of us have been on this forum, why not add her as an AU to one or two and see if they count (FICO 8, they will on older models and there's plenty of CU's pulling those) and therefore dumps her revolving utilization down as it's almost always faster to shed CC debt with a higher credit score... simply more options.

This is a great idea. Then when your remodel is finally paid down, remove each other as AU and it will be like the accounts never happened. I'm sure you have some stuff ready to fall out of 0% promo so you are probably still going to need some heavy lines anyway. I would wait a month or two, ask for some CLI's, then app away.

Re: Lowering utilization via increasing credit lines...

tcbofade — Wed, 31 May 2017 11:17:44 GMT

Thanks all, for the constructive feedback.

We MAY have to replace our AC this summer, and I'm hoping to get her scores high enough to qualify for a zero percent deal.

The SCT might work for some useless utility fluffing... I'm going to chew on that...

We ARE paying the debt down, it just takes a while....

Re: Lowering utilization via increasing credit lines...

Anonymous — Wed, 31 May 2017 11:57:05 GMT

I think it's important to note here that the OP doesn't make any mention of needing higher credit scores right now through decreased utilization. Had they said they were looking to scoop up a mortgage next year or take on another loan it would make sense that they'd want utilization lower and their scores higher.

If they are looking simply for lower utilization and higher scores "just because" (which is fine) there is absolutely no reason to be thinking about adding additional "fluff" cards to help pad utilization. The end result is that the OP is going to need to pay down/off the revolving debt. Whether that's $20k over $30k in total credit lines or $20k over $70k in total credit lines, it's still $20k... and without the need to app any time soon the difference in credit scores really doesn't matter outside of higher scores simply being more mentally pleasing.

Re: Lowering utilization via increasing credit lines...

AverageJoesCredit — Wed, 31 May 2017 12:01:54 GMT

Tcbo, how have you tried getting cli with her Sync cards? Luv button, chat ,or Credit Solutions?

Re: Lowering utilization via increasing credit lines...

Revelate — Wed, 31 May 2017 12:14:21 GMT

@Anonymous wrote:
I think it's important to note here that the OP doesn't make any mention of needing higher credit scores right now through decreased utilization. Had they said they were looking to scoop up a mortgage next year or take on another loan it would make sense that they'd want utilization lower and their scores higher.

If they are looking simply for lower utilization and higher scores "just because" (which is fine) there is absolutely no reason to be thinking about adding additional "fluff" cards to help pad utilization. The end result is that the OP is going to need to pay down/off the revolving debt. Whether that's $20k over $30k in total credit lines or $20k over $70k in total credit lines, it's still $20k... and without the need to app any time soon the difference in credit scores really doesn't matter outside of higher scores simply being more mentally pleasing.

Grin I think the whole original post, or at least the thread title, was a statement to that fact .

FWIW, I don't agree with padding with SCT cards, I wholeheartedly support padding with AU's but that's me. You mention yourself about the 65% line, which may exist in some UW standards, and a higher credit score allows things like refinancing with an installment loan, or opening up a BT line, or a number of other scenarios which might be unobtainable from here. That's all I was getting at with suggesting AU's as a potential idea for gaining more breathing space credit wise. You are absolutely right it should be paid off from a financial responsibility perspective... but I've always thought one of our goals was to help people achieve that more quickly.

End of the day, why would we restrain ourselves to a little niche corner on any topic when it's possible to include ideas which may improve the situation? I'm not one to think that we need to push forum threads into tightly knit little balls of yarn when there's potentially a tasty saucer of milk just outside of it. Yeah that analogy doesn't work so well but I hope you get the picture, thinking cats for some reason

More complete information is better information, and I do think that maxim applies here.

Re: Lowering utilization via increasing credit lines...

NRB525 — Wed, 31 May 2017 12:17:10 GMT

@tcbofade wrote:
DW has mediocre credit scores. Mostly due to high utilization. (65% or so). I am in the process of making sure that no individual account reports over 89% as of 01 July. The only negative information on her credit reports should fall off in June. With nothing maxed out, no derogs, and no inquries in the last year (EX and EQ), one inquiry eight months ago on TU, what is her next step?

Do we try for CLIs on existing accounts, or apply for new accounts?

Seems to me that when requesting soft pull cli's, lenders tend to use dated credit reports, as opposed to pulling a fresh soft pull.

There are certainly lenders that will open new accounts for her in the mid 600s, but nothing better than what she has, so that seems wasteful and self defeating.

Short of winning the lottery, what's the best way (most likely to succeed = best way) to lower her utilization?

Ask for CLIs, or apply for new accounts?

Please and thank you.

Which cards does DW currently have? Bank, brand of card, credit limit and open balance. Expiration timing of any 0% (and whether that has catch up interest if a balance remains).

Part of the improvement in my scores over the last 2+ years was helped by gradually apping and expanding credit.

Once the derogs drop off, getting some legitimate cards with regular BT options ( BofA, Citi, Discover) can help in the Utilization, and longer term saving on interest as the balances are shuffled to lower APR locations.

Paying down is always best, but paying at low APR is next best.

Re: Lowering utilization via increasing credit lines...

SouthJamaica — Wed, 31 May 2017 12:41:37 GMT

@tcbofade wrote:
Thanks all, for the constructive feedback.

We MAY have to replace our AC this summer, and I'm hoping to get her scores high enough to qualify for a zero percent deal.

The SCT might work for some useless utility fluffing... I'm going to chew on that...

We ARE paying the debt down, it just takes a while....

That would be a mistake, adding a bunch of low limit, useless store cards, along with the inquiries, new accounts, and lower average age of accounts it would bring. The opposite of what you should be doing.

Re: Lowering utilization via increasing credit lines...

Anonymous — Wed, 31 May 2017 13:28:07 GMT

I don't think the cards she'd be approved for now will really help matters.

I'd be patient and pay it down. When the situation improves she could be in a position to get another good, useful card if needed.

Re: Lowering utilization via increasing credit lines...

tcbofade — Wed, 31 May 2017 22:47:37 GMT

@Anonymous wrote:
I think it's important to note here that the OP doesn't make any mention of needing higher credit scores right now through decreased utilization. Had they said they were looking to scoop up a mortgage next year or take on another loan it would make sense that they'd want utilization lower and their scores higher.

OK, "need" is a relative term.

While not in my original post, I posted later that we're almost certainly going to have to finance an air conditioner this summer, and I want the best financing possible, hence the "need" for higher scores.

Re: Lowering utilization via increasing credit lines...

tcbofade — Wed, 31 May 2017 22:48:46 GMT

@AverageJoesCredit wrote:
Tcbo, how have you tried getting cli with her Sync cards? Luv button, chat ,or Credit Solutions?

Yes, tried luv button and chat in April... no go, and no suprise. I am deliberately NOT asking in May or June, hoping that a cli request in July will cause them to pull a new report instead of using an older one.

Re: Lowering utilization via increasing credit lines...

tcbofade — Wed, 31 May 2017 22:50:12 GMT

Revelate wrote:

End of the day, why would we restrain ourselves to a little niche corner on any topic when it's possible to include ideas which may improve the situation? I'm not one to think that we need to push forum threads into tightly knit little balls of yarn when there's potentially a tasty saucer of milk just outside of it. Yeah that analogy doesn't work so well but I hope you get the picture, thinking cats for some reason

More complete information is better information, and I do think that maxim applies here.

Couldn't agree more...

I think.

Re: Lowering utilization via increasing credit lines...

tcbofade — Wed, 31 May 2017 22:51:48 GMT

@SouthJamaica wrote:
@tcbofade wrote:
Thanks all, for the constructive feedback.

We MAY have to replace our AC this summer, and I'm hoping to get her scores high enough to qualify for a zero percent deal.

The SCT might work for some useless utility fluffing... I'm going to chew on that...

We ARE paying the debt down, it just takes a while....
That would be a mistake, adding a bunch of low limit, useless store cards, along with the inquiries, new accounts, and lower average age of accounts it would bring. The opposite of what you should be doing.

I agree with that, too. A "bunch" is NOT what I'm after.

If Sportsmans Visa or something similiar would give here a decent starting credit limit with a soft pull/pre approval, it might be worth considering.

We certainly don't need 16 more of them....