topic Re: credit cards for high utilization + auto loan in Credit Cards

credit cards for high utilization + auto loan

creditwatcher2012 — Wed, 06 Mar 2013 06:21:14 GMT

So I have verry high utilization I think in the 70's percentile, I am looking to open new cc's to help out with my current utili.... I have alot of inquires,

I recently applied and was approved for GECB WALMART 200.00 & GECB American Eagle 150.00, but was declined for GECB Lowes.... seams offle strange to me..

Income 92k annualy

Current CC's

Chase Freedom-4k/3400

Chase BP-1700/1400

Capital One No Hassle Rewards-500/390

Capital One-500/400

Orchard Bank- 400.00/300

Credit One-300/124.00

Target National Bank-200/0

Walmart GECB-200/0

American Eagle GECB-150/0

Barclay Financing Apple-1k/950.00

Merrick Bank-1k/996

creditline/percent used...

Also as an update, my plans are to somehow secure an auto loan by June, my last post I stated that I had extremely high utilization, and as you see I have been working on it, I am down to 70 something percent, I am just afraid of AA expecially on my apple financing becasue everymonth I make like a 200.00 payment but keep charging it up with differnt memberships, one of them being my fico....

Honest opinions please, do you think I will be subject to AA? I mean I have been paying my cc's down...

Ill tell you I will never get myself in a jam like this, with high utilization evert again..... also I have a 5k personal loan out recently opened a few months back...

Prior lated on auto loan with ford credit 21 late payments total....... I have 60 inquires on experian, 58 on equifax, and 24 on tr..... (all from auto loan denials when I had NO established credit).......over the past 12 months i have built credit and opend all my credit card accounts expecpt for 3 capital ones... my ? is do you think by June if I have a utilization of 10% I will be able to successfully obtain a 40k auto loan thru infiniti financials with 20% down, on a 52-55k car?

Thanks for al your help.....

Re: credit cards for high utilization + auto loan

09Lexie — Wed, 06 Mar 2013 06:34:11 GMT

@creditwatcher2012 wrote:
So I have verry high utilization I think in the 70's percentile, I am looking to open new cc's to help out with my current utili.... I have alot of inquires,

I recently applied and was approved for GECB WALMART 200.00 & GECB American Eagle 150.00, but was declined for GECB Lowes.... seams offle strange to me..

Income 92k annualy
Current CC's
Chase Freedom-4k/3400
Chase BP-1700/1400
Capital One No Hassle Rewards-500/390
Capital One-500/400
Orchard Bank- 400.00/300
Credit One-300/124.00
Target National Bank-200/0
Walmart GECB-200/0
American Eagle GECB-150/0
Barclay Financing Apple-1k/950.00
Merrick Bank-1k/996

creditline/percent used...

Also as an update, my plans are to somehow secure an auto loan by June, my last post I stated that I had extremely high utilization, and as you see I have been working on it, I am down to 70 something percent, I am just afraid of AA expecially on my apple financing becasue everymonth I make like a 200.00 payment but keep charging it up with differnt memberships, one of them being my fico....

Honest opinions please, do you think I will be subject to AA? I mean I have been paying my cc's down...

Ill tell you I will never get myself in a jam like this, with high utilization evert again..... also I have a 5k personal loan out recently opened a few months back...

Prior lated on auto loan with ford credit 21 late payments total....... I have 60 inquires on experian, 58 on equifax, and 24 on tr..... (all from auto loan denials when I had NO established credit).......over the past 12 months i have built credit and opend all my credit card accounts expecpt for 3 capital ones... my ? is do you think by June if I have a utilization of 10% I will be able to successfully obtain a 40k auto loan thru infiniti financials with 20% down, on a 52-55k car?

Thanks for al your help.....

I am not sure where to begin! First, stop apping! Your expenses are out of control and the way to get your util down would be to continue to pay your cc debt. I would start by paying down the cards with the highest int rate.

Second, Make a budget and stick to it - no matter how tempting it is to charge or app it is not in your best interest.

Third, Regarding a car loan, the rate you might be offered will make your payments astronomical at this point. If you start to get your util under control, your scores will go up and a nice rate is obtainable in the future.

If you get your util down to <10% in June, it will take a few months for your scores to recover. I'd plan on early Fall- when the new models come out.

Goodluck and sorry to be so blunt.

Re: credit cards for high utilization + auto loan

Anonymous — Wed, 06 Mar 2013 06:49:19 GMT

Agreed. 70% is way too high. That's over $8,500 in CC....that's almost 10% of your income. I don't often give input like this since I don't know most people's situation but others input from here has saved my hide before.

If you can go without this new auto loan do it. Pay down that CC debt first and you will be saving yourself a lot of grief/interest, plus the risk you have of missing one and getting a late payment. And my goodness....stop app'ing!

Re: credit cards for high utilization + auto loan

Anonymous — Wed, 06 Mar 2013 06:51:50 GMT

Also if you can afford 20% on a car....pay off your CC first! I think you really need to analyze your lifestyle and budgeting.....ouch was that too mean 😳

Re: credit cards for high utilization + auto loan

Anonymous — Wed, 06 Mar 2013 06:53:22 GMT

One more thing. You make 92k/year you should be able to eliminate this debt real fast. Just make it your priority and get serious about it. Forget about the car loan. Just pay that debt down and when it drops away your next move will be much clearer to see.

Re: credit cards for high utilization + auto loan

09Lexie — Wed, 06 Mar 2013 06:56:49 GMT

@Anonymous wrote:
Also if you can afford 20% on a car....pay off your CC first! I think you really need to analyze your lifestyle and budgeting.....ouch was that too mean 😳

I was thinking the same thing but I thought I had already delivered too many body blows. 😁

Re: credit cards for high utilization + auto loan

Anonymous — Wed, 06 Mar 2013 07:49:40 GMT

@creditwatcher2012 wrote:
So I have verry high utilization I think in the 70's percentile, I am looking to open new cc's to help out with my current utili.... I have alot of inquires,

I recently applied and was approved for GECB WALMART 200.00 & GECB American Eagle 150.00, but was declined for GECB Lowes.... seams offle strange to me..

Income 92k annualy
Current CC's
Chase Freedom-4k/3400
Chase BP-1700/1400
Capital One No Hassle Rewards-500/390
Capital One-500/400
Orchard Bank- 400.00/300
Credit One-300/124.00
Target National Bank-200/0
Walmart GECB-200/0
American Eagle GECB-150/0
Barclay Financing Apple-1k/950.00
Merrick Bank-1k/996

creditline/percent used...

Also as an update, my plans are to somehow secure an auto loan by June, my last post I stated that I had extremely high utilization, and as you see I have been working on it, I am down to 70 something percent, I am just afraid of AA expecially on my apple financing becasue everymonth I make like a 200.00 payment but keep charging it up with differnt memberships, one of them being my fico....

Honest opinions please, do you think I will be subject to AA? I mean I have been paying my cc's down...

Ill tell you I will never get myself in a jam like this, with high utilization evert again..... also I have a 5k personal loan out recently opened a few months back...

Prior lated on auto loan with ford credit 21 late payments total....... I have 60 inquires on experian, 58 on equifax, and 24 on tr..... (all from auto loan denials when I had NO established credit).......over the past 12 months i have built credit and opend all my credit card accounts expecpt for 3 capital ones... my ? is do you think by June if I have a utilization of 10% I will be able to successfully obtain a 40k auto loan thru infiniti financials with 20% down, on a 52-55k car?

Thanks for al your help.....

Ok, I don't mean to be a party pooper, but you honestly got to stop.

At this rate you are going, any reputable bank is going to initiate a financial review on you and most likely cancel your card(s) outright, rather than to lower your limit. This is because you owe balances on TOO MANY cards. If you owe balances on 2-4 cards, I would say that's still okay. But to owe so many balances on so many cards, plus an auto loan, plus a personal loan, and still applying for new lines of credit? If anyone is to read about your financial status on paper, it will seem like you're having very serious financial issues.

The good thing though, is that a lot of your balances are very small on many cards (credit one, orchard bank, capital one, etc), so paying them off is easy. Just pay them off ASAP. Isn't it tiring too to worry about this many due dates each month? Bring down the balances on your cards, pay certain cards off first so they report 0 balance so it doesn't seem as bad. Or alternatively, if saving money is your priority, then pay off the card with the highest APR first.

The thing is you make 92k......I don't see why you're bothered with applying for all these random cards with small credit limits. Someone with your income ought to be having cards with 5-15k CL from reputable banks instead.

Now, on the plus side, you're making 92k. Paying off all these debt, if you set your mind to it, will take less than 1 year, or a year and half at most.

Even if you do manage to get a new credit card, the limit is going to be around 1000. Is 1000 bucks going to help drastically with your current scenario? More than likely applying for new cards will just result in more trouble for you by having existing credit cards you have go into financial review.

About your inquiries.....60 inquiries is just crazy regardless of whether you're doing loan shopping or whatever you tried to do. No underwriter or credit analyst is going to turn a blind eye to that. To them it might just seem that you couldn't get any loans from any banks at all because your credit situation is just too horrible. Please just wait for the inquiries to fall off after 24 months.

You also opened all those credit accounts in the past 12 months. Your AAoA is going to be extremely low.

With your current situation, you're going to get an extremely high APR for your auto loan. Most sane banks probably will pass on you as well. You might want to consider getting the car maybe in December instead of June? You can get some good year end sales then as well.

The best way for you to do things right now, is to pay off all (or at least most) of those debt first. Then, work on your personal loan. Finally, after your score is up, buy your car. You might have less cash for downpayment and end up financing more, but at least you can get a better APR and you can work on paying that car off early.

I don't mean to be rude or condescening but your situation is pretty alarming. On the bright side you make 92k so getting out of this hole is much easier for you.

Best of luck!

Re: credit cards for high utilization + auto loan

creditwatcher2012 — Wed, 06 Mar 2013 09:59:54 GMT

Thanks for all the replys especially to enharu, and a few months ago like a month and a half my util was over 100% someone told me, so I am continuing to pay down my cc's, and hopefully they will all be paid off shortly, I make 92k a year but have alot of bills...college tuition 4 kids....house bills...etc...

I just have a few more questions, someone said it will take a while for my scores to recover, does that mean if say I was to pay off all cc's hypothetically tommorow that next month they wont be back to where they were before the uti was 70%.....and also in your honest oppinon will the banks close my cards even thou I am make more than the monthly payments.... i usually make 4x the monthly payment.... but like on the 7th in a few days the chase BP is due and I am only going to pay double the min payment....

I hope they dont take AA against me, I am doing everything I can to pay them off quickly...

and why would they even close them if I am NEVER late on them, and I pay promptly and more than what is due...?

And once again thanks to all the replys..., and about the car, I really need a new one, so if Everything is paid off by June, would it really hurt me to apply with IFS, and try to obtain a loan at a decent rate like maybe 5-7%?

Re: credit cards for high utilization + auto loan

Anonymous — Wed, 06 Mar 2013 10:14:45 GMT

From personally experience. It is better to have high utilization on 1 card, then to have small utlization on 10 cards. The original poster has a balances on many cards...

Re: credit cards for high utilization + auto loan

Anonymous — Wed, 06 Mar 2013 10:25:44 GMT

Instead of opening more credit cards, you ought to just consolidate everything into a personal loan, if you really need more credit.

but with the way things are, i would say just keep paying things down, at least for the next few months, before u start applying for anything else. Also give time for the inquiries to be >12months at the very least.

if you pay your debt immediately, i am not too sure if your score jumps up to its maximum potential immediately, or if it will take a few months or longer. however, i have seen people who posted that one of the reasons they got declined was Experian reported their credit card balances were all recently paid down in the CR when they tried to apply for new credit. So I am assuming the credit bureaus keep track of that. However, I am not entirely sure and I have only seen that happen twice.

Most importantly, paying off your debt is a good thing. You might have to call recon to persuade you on extending you credit if you were declined for paying off huge balances only recently, but it's easy to explain that, and I am sure it's not a big problem at all. For your case, you owe 10k and make 92k, so I am sure they wont make a big deal out of you paying 10k debt instantly.

Banks will close your card whenever you cross their maximum risk threshold. There is usually no room for negotiations or appeals when it does comes to that, so you really want to avoid that. If they think you're higher risk than before, they might just decrease your CL or increase your APR. it's hard to say what actions causes this or paying how much is ideal, because each bank policies varies, and it also varies for each individual. When you apply for many cards over a short period of time, and/or have high utilization across your cards, thats usually a big red flag for any bank. You might argue that it's just 300 bucks and utilization is high because of your low CL, but banks care as much about the percentage as the dollar amount. There's no need to worry about AA or closure unless you're going on another applying spree or maxing out your other cards. A lot of times the external factors cause it more than the internal ones (such as your payment).

They will close on you, or initiate financial review, when they think you're high risk. For example, the system (or analyst) determines whether you're wayyyy overstretched and your debt patterns "match" patterns of individuals who started having late payments, charge offs, going into collections, or even bankruptcy. If they think it's going to be a lost cause, they'll close the account and get the money back from you before things turn ugly, such as you defaulting on them. Of course, you may not necessary be in as bad of a financial shape that they think you are in.

5-7% for an auto loan is very high, considering the current economy. if you're willing to get such a high rate, and can leave a bigger downpayment (such as up to 50%), i wouldn't worry too much then.

Re: credit cards for high utilization + auto loan

Anonymous — Wed, 06 Mar 2013 10:24:14 GMT

@creditwatcher2012 wrote:
Thanks for all the replys especially to @Anonymous, and a few months ago like a month and a half my util was over 100% someone told me, so I am continuing to pay down my cc's, and hopefully they will all be paid off shortly, I make 92k a year but have alot of bills...college tuition 4 kids....house bills...etc...

I just have a few more questions, someone said it will take a while for my scores to recover, does that mean if say I was to pay off all cc's hypothetically tommorow that next month they wont be back to where they were before the uti was 70%.....and also in your honest oppinon will the banks close my cards even thou I am make more than the monthly payments.... i usually make 4x the monthly payment.... but like on the 7th in a few days the chase BP is due and I am only going to pay double the min payment....

I hope they dont take AA against me, I am doing everything I can to pay them off quickly...

and why would they even close them if I am NEVER late on them, and I pay promptly and more than what is due...?

And once again thanks to all the replys..., and about the car, I really need a new one, so if Everything is paid off by June, would it really hurt me to apply with IFS, and try to obtain a loan at a decent rate like maybe 5-7%?

You need to focus on paying off 1 credit card at a time.

Instead of making double payments on multiple cards, just make the bare minmum payment on all cards except the card you are trying to pay off first. Use the extra cash to pay off one card at a time.

The next billing cycle, you will have one less card to worry about. Once you paid off a card, hide it in your sock drawer and do not use it.

Re: credit cards for high utilization + auto loan

creditwatcher2012 — Wed, 06 Mar 2013 10:49:19 GMT

Thanks, yea I'm not charging any more on my cards, when the walmart card and american eagle come I am only charging something small like 50 and paying it off the next day just to keep the account active, my reasoning was by opening those two cards it might just slightly help with utilization.... And plus I got a pre approval for the walmart, at this point I am paying the cards down and will eventually get them all down to 0, I am never late or anything so I'm keeping my fingers crossed that no AA happens.... Or cld or anything.... What would cause them to initiate a financial status report? Do you think I am at high risk for having my cards closed?

Re: credit cards for high utilization + auto loan

creditwatcher2012 — Wed, 06 Mar 2013 10:50:56 GMT

And yea all my cards except my debit card is in my sock drawer

Re: credit cards for high utilization + auto loan

Anonymous — Wed, 06 Mar 2013 12:50:51 GMT

its hard to say whether you're high risk or low risk. Different banks have different policies on risk exposure for each subset of customers. However with 60 inquiries, plus balances on this many cards, coupled with a personal loan and auto loan sounds like you're higher risk than most customers. If they didn't contact you about a financial review, you're fine for now and there's no point in worrying about something that hasn't or may not happen. Besides even if they do, there's nothing much you will be able to do at that point.

if you want to lower your utilization, the best way is to always pay down debt. other than that, ask for CLI from existing cards. You have a high income. Opening so many credit cards will only lower AAoA, adds to the number of inquiries, and just makes everything messier with so many different bills to pay and all that hassle.

If I were you, I would leave the useless cards as it is and let them be deactivated on its own for inactivity. I honestly don't see why and how is orchard bank is going to help you down the road for example.

Re: credit cards for high utilization + auto loan

Anonymous — Wed, 06 Mar 2013 12:59:18 GMT

You don't need to charge something to keep your cards active. The balances that are already on there keep them active...that only applies if your balance is zero so stop charging. As others said you need to pay your cards down and stop applying for credit. Your recent inquiries for these new cards are going to tank your score more and jeopardize getting a new vehicle.

I told you this before but your income really is not sufficient for a $52K car plus you have 4 kids! I know you were wanting to buy a house in the future too but with that $800-$1000 per month car payment you will have, will drastically reduce the amount of home you can afford. You really need to wait two years to get your UTIL down and for those inquiries to fall off in order to get approved with realistic terms or to even get approved at all!

I think you are over estimating how far your salary truly goes. I make $96K, leased a $35K Acura TL for $536 per month (I got tier 1 financing and it really is a very nice car, financing it would have cost $641 per month...way too much IMO), and I purchased a home for $347,900 last month (payment is $2385 per month, which includes PITI + PMI + homeowner's insurance). This is my max affordability and I only have one child.

Most people lease luxury cars because the payment is much lower but a lease on a $52K car is still too much IMO for your income especially if you want to buy a house. Getting approved for the lowest rate on a lease requires excellent credit (720 or above, usually) and these dealerships won't lease to you if your credit score is too low. Luxury dealerships require better credit than standard dealerships.

I have 4 credit cards with a combined limit of $7600. I am only carrying a balance on one card that offered 0% for 24 months on some electronics I bought for the house last month. I don't plan on paying it for 24 months either....more like 4-6 months of payments. The other 3 cards are used for EVERYDAY expenses, which means I charge what I would pay cash for on cards, and the money in my bank account piles up to the balances on those cards and I pay in full every month. This is how credit cards are supposed to be used most of the time.

You definitely don't need more credit right now.

So I want you to look at my expenses and try replacing it with a much higher car payment, etc. just to see how ridiculous that would be.

You are simply using more money than your income supports. Once your cards are paid off, you need to use credit cards only if you have the cash available not when the cash is unavailable. Pick 2-3 cards as your everyday cards and zero the rest out and only use for rainy day or emergency expenses.

If you don't get control of your bad habits now, I could see you filing BK after the high car and mortgage payments start coming in with your continued irresponsibility of maxing out cards.

Stop trying to live like the Jones and live within your means...life would be so much less stressful! You should also be able to save $500-$600 per month on top of paying your bills and other expenses with your income. Setup a recurring transfer of $125-$150 per week even if you have to transfer some of it back as you will still be saving something.

You should seriously consider a more realistic vehicle and home purchase plus stop apping! Good Luck and I hope you're listening.

Re: credit cards for high utilization + auto loan

ramblin_wreck08 — Wed, 06 Mar 2013 14:20:04 GMT

I agree with the other posters. Here's the gameplan I would use to improve your financial situation.

1. Adjust your spending with the sole goal of getting out of CC debt as fast as possible
2. Pay off all cards, starting with the lowest balances first. Pay only the minimum balance due on all the others. This will help your credit standing tremendously. The Credit One, Orchard, an Capital One cards can be paid off in no time, leaving a balance on just 4 of 11 cards. This looks much better than 8 of 11.
3. I don't see the Orchard and Credit One cards helping you in the future. There are others as well. You have a relationship with Chase. Focus on this one. Unless there is something I'm missing, why don't you just put the Orchard, Credit One, etc. cards in the sock drawer and let them fall off due to inactivity? Maybe pick a handful of your favorite cards and let the others fall off. Given your utilization issues, don't close them now. Let them close themselves due to inactivity.
4. Let your credit inquiries age to 1 year + before applying for any new credit. 60 is an astronomically high number. You are making lender nervous. Take a break.
5. Forget about the car until you pay off these debts. Once they're gone you will be able to save for the car that much quicker since you won't be throwing money into interest payments. That $10k + you are planning to put down could get you out of CC debt. If you absolutely need a car because yours isn't running properly, opt for a used, much less expensive model for the time being. That car that was $50k-$55k a few years ago can be had in great shape for $20-$25k today. That's $6k less in a down payment if you want to put $20k down. You may not have a new car, but you'll still have a very nice one and have a lot less to worry about. Still, I would work on paying off the CC debt and give a couple months after that for some recovery time before applying.

Best of luck to you! This is a big hole to dig out of, but I know you can do it!

Re: credit cards for high utilization + auto loan

ramblin_wreck08 — Wed, 06 Mar 2013 14:22:54 GMT

I apologize or the typos above (such as putting $20k instead of 20% down). Typing so much on the phone isn't easy. Haha

Re: credit cards for high utilization + auto loan

creditwatcher2012 — Wed, 06 Mar 2013 15:00:24 GMT

Thanks for your feedback, especially to moving forward and ramblin wreck, that's what I am doing if you read my prior posts a few months ago I have inporoved somewhat on my uiltilization, and with your help I'm sure I can get my debts under control... I definitely understand what you are saying moving forward about the 52k car, when I had a quote and was approved in September and August it was 630 a month for 6 years at 5.6 % intrest rate, I was also approved for a lease however I drive way more than the annually allowance, if the 10k for the down payment was liquid right now I would of payed my cc's down however that money was put into a cd that doesen't mature until a few more months, I think maybe end of this month or middle of April... ...

At this point, I did listen to your advice moving forward last time and worked on my utilization, I figured by opening new credf cards my uti would improve to an extent....

I am very worried that banks are going to close my accounts even with a balance, I not wan that to happen, like I said I do pay more than the monthly minimum payment....

Ad regarding the car when I looked at competitors for example Acura they wanted 43k for a SUV that was basic compared to the infiniti....

I am detonate let determined to get my finances under control, and I have begun thanks to of guys at myfico...

Please excuse typos, I am on my phone...
Thx

Re: credit cards for high utilization + auto loan

Anonymous — Wed, 06 Mar 2013 15:55:22 GMT

you guy dont know this boy. why you keep posting like this? check it out

http://ficoforums.myfico.com/t5/Auto-Loans/Denied-Denied-Denied/td-p/1715170

http://ficoforums.myfico.com/t5/Credit-Cards/Can-banks-close-your-credit-cards-for-high-utilization/td-p/1778246

http://ficoforums.myfico.com/t5/Credit-Cards/Does-having-alot-of-credit-cards-help-your-credit-profile/m-p/1774186

Why you keep ask same question?

with 92k for year,but can not pay for your debt?

why keep playing with another momber?

Re: credit cards for high utilization + auto loan

Anonymous — Wed, 06 Mar 2013 16:31:48 GMT

The Acura SUVs may not have all the bells and whistles you want but some of us can't have it all. You either get the Infiniti with a condo or an Acura with a 4bd single family home. You are going to have to choose one or the other because if you don't, you are going to be up to your ears in debt. The Acura RDX starts at $35K...the MDX or ZDX must be what you were looking at. If you come to the table with $20K down on the Infiniti, then ya I think it is reasonable but then where is the downpayment for the house going to come from? You simply don't make enough money for what you want.

Adding cards to reduce Util works but that doesn't mean it is the right thing to do. As most likely right now you would only get approved for low limits which will not increase your score very much at all. With your utilization, you need a $5000 credit limit to see a noticeable dent and lenders are just not going to extend that to you right now.