topic Re: Credit card Help in Credit Cards

Credit card Help

Anonymous — Tue, 26 Jan 2021 01:23:13 GMT

Hey guys!! I'm brand new to this forum and pretty new at rebuilding my credit. I have maxed out most of my credit cards but want to get some of them paid down this month. I have $2500 to pay towards them but I'm unsure as to where to start to get the most "bang for my buck " as far as my credit score.

This is my utilization as of today.

Credit One: 0/500

Credit One: 561/650

Cap One: 372/550

Cap One: 1095/1150

Cap One: 1132/1250

Ollo: 1293/1500

My EX score is 557 as of yesterday.

Thanks so much for your help.

Re: Credit card Help

FinStar — Tue, 26 Jan 2021 01:38:40 GMT

Hi @Anonymous and welcome to the forums.

Glad to hear some funds are available to considerably pay down the majority of those balances. Can you provide the APRs for each of the cards that have balances?

Re: Credit card Help

Yankee2 — Tue, 26 Jan 2021 01:47:46 GMT

If your looking at saving the most money, pay off the highest interest cards first. If one is still almost max'ed, still just pay the minimum.

If your looking at the best score increase, I would pay off in this manner which all cards would be below 40%

Credit One: 0/500-

Credit One: 561/650- $325

Cap One: 372/550- $175

Cap One: 1095/1150- $650

Cap One: 1132/1250 - $650

Ollo: 1293/1500 _ $700

Re: Credit card Help

Anonymous — Tue, 26 Jan 2021 02:02:17 GMT

@Anonymous wrote:
Hey guys!! I'm brand new to this forum and pretty new at rebuilding my credit. I have maxed out most of my credit cards but want to get some of them paid down this month. I have $2500 to pay towards them but I'm unsure as to where to start to get the most "bang for my buck " as far as my credit score.
This is my utilization as of today.
Credit One: 0/500
Credit One: 561/650 86%
Cap One: 372/550 68%
Cap One: 1095/1150 95%
Cap One: 1132/1250 91%
Ollo: 1293/1500 86%
My EX score is 557 as of yesterday.
Thanks so much for your help.

Hi @Anonymous and welcome to the forum! Up above in bold italics I've put the utilization percentage of each card. This is a very important metric - there are scoring tiers in credit based on how much of your limit you have used. They are:

8.9/28.9/48.9/68.9/88.9%

These tiers apply to individual cards as well as your aggregate usage (in your case, that is 78.1% which is very high). Typically we look at being under 48.9% as being safe, so long as you're making progress decreasing this each month. Your $2500 can reduce your overall usage from 78.1% down to 34.3%, which would be great. You would cross two scoring tiers, and each of those could boost your scores by 15 points, possibly a bit more.

You're right to ask how best to do it though, because by bringing your cards through tiers as well, you can net additional points. First priority is to get each below 48.9%. In reality you should shoot for 47% so that when interest is added, you remain below the 48.9% breakpoint. That means paying the following amounts:

Credit One - $256

Cap One #1 - $114

Cap One #2 - $555

Cap One #3 - $545

Ollo - $587

That gets each card to 47% and gets you out of danger territory. So far that's a total of $2057 spent, leaving $443 to go. I would put $305 more on Credit One and pay it off, and then $138 on Cap One #1 to pay that down to $120. That's a total of $2500. Final payments then would be as follows:

Credit One - $561 (pay off)

Cap One #1 - $252

Cap One #2 - $555

Cap One #3 - $545

Ollo - $587

You will have two cards at zero, a $120 balance on a third (pay that off as soon as you can), and safer balances on the rest which you can work down.

Note that after paying $2500 on your cards, your aggregate usage is 34.3%. Paying that down to 27% gets you comfortably under another scoring tier and into no-worry territory. That would be just over $400. If you can put that much more into your cards in the near future, you'd be looking at another score jump. I would apply it in such a way that it pays off as much of another card as possible. Additional points are realized by having fewer than 50% of your cards with a balance in some scoring models. Getting your usage to 27% conceivably could put your score over 600. It makes a difference!

Re: Credit card Help

SouthJamaica — Tue, 26 Jan 2021 03:34:35 GMT

@Anonymous wrote:
Hey guys!! I'm brand new to this forum and pretty new at rebuilding my credit. I have maxed out most of my credit cards but want to get some of them paid down this month. I have $2500 to pay towards them but I'm unsure as to where to start to get the most "bang for my buck " as far as my credit score.
This is my utilization as of today.
Credit One: 0/500
Credit One: 561/650
Cap One: 372/550
Cap One: 1095/1150
Cap One: 1132/1250
Ollo: 1293/1500
My EX score is 557 as of yesterday.
Thanks so much for your help.

I would pay the following:

2nd Credit One card $249

1st Cap One card $218

2nd Cap One card $773

3rd Cap One card $782

Ollo $478

If you can put together an additional $453 put it on the Ollo card.

Re: Credit card Help

Anonymous — Tue, 26 Jan 2021 13:00:58 GMT

Thanks everyone for your responses. It seems like the consensus is to get the vast majority of the cards down to 30%. I will let you guys know when everything has updated.

Re: Credit card Help

Anonymous — Tue, 26 Jan 2021 21:58:42 GMT

Everyone else gave you good advice so the only thing I'll add is CANCEL CREDIT ONE IMMEDIATELY. You have a few good starter cards and now is the time to rid yourself of the garbage can that is Credit One.

Re: Credit card Help

Anonymous — Wed, 27 Jan 2021 01:16:05 GMT

@Anonymous wrote:
Everyone else gave you good advice so the only thing I'll add is CANCEL CREDIT ONE IMMEDIATELY. You have a few good starter cards and now is the time to rid yourself of the garbage can that is Credit One.

The OP needs every bit of utilization padding they can get right now. DO NOT CLOSE CREDIT ONE IMMEDIATELY

Re: Credit card Help

Anonymous — Wed, 27 Jan 2021 01:27:47 GMT

^^^ that.

The time will come soon enough that she can cancel it but now is not the time.

Re: Credit card Help

Anonymous — Wed, 27 Jan 2021 13:34:23 GMT

Thanks everyone ☺

Re: Credit card Help

Anonymous — Wed, 27 Jan 2021 14:09:20 GMT

I'm not an expert at this but, this is how I would tackle this given, the information provided. Everyone has given you solid advice already. Kudos to you for trying to bring this under control! I would disburse the 2500 as follow:

372/550- (68% uti ) pay off, bring to 0% uti

561/650- (86% uti ) pay 303, bring to 40% uti

1095/1150 (95% uti) pay 575, bring to 47% uti

1132/1250 (90% uti), pay 575, bring to 46% uti

1293/1500 (86% uti), pay 675, bring to 43% uti

*** adjust to account for interest charges***

This way, you have 1 acct at 0% uti and 4 accts below 49%, crossing 3 uti thresholds and giving you a score boost.

Re: Credit card Help

SecretAzure — Wed, 27 Jan 2021 19:32:18 GMT

I like this question because there are multiple ways to go about it.

Some are prioritize scoring, some lowest interest paid, and some are doing some hybrid mix of both or neither. As you're someone with enough cards for a solid credit profile, personally, I would recommend going the interest route first. If you're applying for a mortgage loan in the next couple of months, it may benefit you to optimize scoring instead and pay cards under 48.9% util like DevilDude said. Unless you frequently have additional thousands of frivolous spend thrown your way, I would do everything possible to pay the least amount of interest I can to the creditors. That means taking a look at your interest rates and going down, in order of highest to lowest to get those balances eliminated where they're high until you're done.

Future planning:

As someone mentioned, Credit One is a predatory garbage lender. Once your balance has been paid down for a while, make sure to axe it. If the Capital One is a secured card, I would axe that as well but even further down the line (perhaps right before AF is due if that falls ~6 months after you close Credit One).
It's a good idea to not have spend across your entire portfolio. You have 6 cards. If you're carrying balances, try to keep it on 1-2 cards.
I'm going to assume your average age of credit isn't very high (I could be very wrong here). If it's less than 2 years total, I wouldn't apply to anything else for a while...possibly over a year to build that credit factor into a stronger position.

Re: Credit card Help

SouthJamaica — Wed, 27 Jan 2021 18:38:24 GMT

@Anonymous wrote:
Thanks everyone for your responses. It seems like the consensus is to get the vast majority of the cards down to 30%. I will let you guys know when everything has updated.

UNDER 30%

Go to 28%

Re: Credit card Help

TheCreditCount — Wed, 27 Jan 2021 20:58:43 GMT

I think everyone is giving you pretty solid advice. 30% will be a solid goal but don't let that stop you once you get there! Then maybe you try and continue to get below 10% and so on and so forth.

As for the Credit One card, they are a horrible lender. After paying off the cards if they are your youngest credit line I would consider cancelling them and if it has any annual fee I would absolutely suggest cancelling them even if its an older line. Throwing away $39-$99 a year will be an anchor pulling you down on your credit goals when you're with a lender who does not offer any future in the relationship. On the off chance you have a $0 annual fee Credit One card (especially if it's relatively old) after paying it off you may consider putting on a small recurring expense or donation, setting it to autopay, and banishing it to the sockdrawer.

Re: Credit card Help

Remedios — Wed, 27 Jan 2021 22:26:52 GMT

Please, this thread is not a referendum on Credit One.

While they're less than ideal lender, let's remember there is a reason why some people have to start there.

Sure, there is AF and fees, but that's the price for charge offs and other negatives on the CR.

@Anonymous while paying down your cards will help with your scores to some extent, working on your negatives will probably yield even better results.

I suggest you visit Rebuilding subforum and see if anything can be done to overall improve your situation.

Re: Credit card Help

HHH71 — Thu, 28 Jan 2021 03:51:23 GMT

Agree with most on here. Work to get them all below 30% before you pay any one off. That is if your looking to boost your score. The 30% rule applies to all cards AND each card. I experimented last year and put 95% on one card. Overall I was around 15% utilization, but my score dropped 60 points once the statement hit. I paid that card in full and the next month my score went right back up the 60 points to where it was.

Make sure you make your payments before a statement is created. Then the lower balance will report increasing your score.