topic Re: Need advice from 660 to 720+ in Understanding FICO® Scoring

Need advice from 660 to 720+

joshall — Sun, 20 Mar 2016 02:23:50 GMT

Dear fellow bloggers,

What would be the quickest way to raise FICO scores from 660 to 740?

8 months ago, we closed on a house and took on a car loan. We spent a tremendous amount of credit to purchase new furniture too.

My FICO scores plummeted to low 600's but it has steadily increased with the consistent minimum monthly payment (10 points per month). We don't have negative remarks, no late payments. Our constraint is very high utilization.

Here are our credit card utilization. We know they are quite high, so please don't judge.

RH: 85%

WE: 40%

LS: 80%

CC1: 90%

CC2: 90%

AE1: 85%

AE2: 85%

CA1: 90%

CA2: 80%

MA1: 0%

Any advice is greatly appreciated!

Thank you so much in advance.

Re: Need advice from 660 to 720+

CH-7-Mission-Accomplished — Sun, 20 Mar 2016 02:26:42 GMT

Uhm .... pay down your debt.

(Seriously. That's the only way to raise your scores.)

Re: Need advice from 660 to 720+

joshall — Sun, 20 Mar 2016 02:29:14 GMT

Yes, but which CC debt should we pay down first? Should we pay one down and leave the other high for a fast increase? Or pay down all CC equally?

Re: Need advice from 660 to 720+

silkysean — Sun, 20 Mar 2016 02:56:07 GMT

@joshall wrote:
Dear fellow bloggers,

What would be the quickest way to raise FICO scores from 660 to 740?

8 months ago, we closed on a house and took on a car loan. We spent a tremendous amount of credit to purchase new furniture too.

My FICO scores plummeted to low 600's but it has steadily increased with the consistent minimum monthly payment (10 points per month). We don't have negative remarks, no late payments. Our constraint is very high utilization.

Here are our credit card utilization. We know they are quite high, so please don't judge.

RH: 85%
WE: 40%
LS: 80%
CC1: 90%
CC2: 90%
AE1: 85%
AE2: 85%
CA1: 90%
CA2: 80%
MA1: 0%

Any advice is greatly appreciated!

Thank you so much in advance.

Pay down cc debt.The higher the credit limits means more debt.I would pay the least highest first.The ones at 90% first.But if it's easier to pay off others d do that.Goal is to pay down total debt.Honestly until those cc"s are atleast 30% total Util scores won't get back up those 80 points.So if total CC debt is say 20,000 until it gets to about $6,000 or lower.Remember Time and paying those cards down will bring those scores back up.You have new house,car,furniture no more big ticket items needed for awhile so don't rush paying if it puts a strain on finances

Re: Need advice from 660 to 720+

Appleman — Sun, 20 Mar 2016 14:40:44 GMT

A credit card at 90% utilization appears as MAXXED out to the creditor. My first goal would be to get all of the cards reporting below 90%. See what that does for your scores.

I would look for a free snowball/avalance site that will show you how quickly you would/could pay off your debts. I use undebt.it as it is free. Once a month I just update my balances rather than let that program track every payment.

If you have not done so get a budget. Plenty of good ones out there to try. Once you begin to use a budget as a couple it will change your life and relationship for the better. I am a fan of YNAB (34 day free trial), some like mint, dave ramsey and others.

I will certainly not judge you but be kind to your future self and begin to live below your means. A budget can help you control your financial life and use credit to your advantage.

Good luck!

Re: Need advice from 660 to 720+

NRB525 — Sun, 20 Mar 2016 14:54:25 GMT

@joshall wrote:
Dear fellow bloggers,

What would be the quickest way to raise FICO scores from 660 to 740?

8 months ago, we closed on a house and took on a car loan. We spent a tremendous amount of credit to purchase new furniture too.

My FICO scores plummeted to low 600's but it has steadily increased with the consistent minimum monthly payment (10 points per month). We don't have negative remarks, no late payments. Our constraint is very high utilization.

Here are our credit card utilization. We know they are quite high, so please don't judge.

RH: 85%
WE: 40%
LS: 80%
CC1: 90%
CC2: 90%
AE1: 85%
AE2: 85%
CA1: 90%
CA2: 80%
MA1: 0%

Any advice is greatly appreciated!

Thank you so much in advance.

Could you expand on the details? I don't recognize the abbreviations. Bank name, card name, your credit limit, the APR you are paying, and the current balance would all be very helpful for specific suggestions. There's a big difference between a store card and a regular credit card, and sorting those two groups out is one of the first steps. Determining APR is also an important step.

Listing out all the gory details, including actual balances, can be helpful also because it puts in stark reality how much debt we are talking about. 90% utilization on a $250 limit store card is a different conversation from 60% utilization on a $10,000 regular credit card.

Re: Need advice from 660 to 720+

joshall — Sun, 20 Mar 2016 16:47:32 GMT

Thanks so much for all the feedback. Let me categorize them accordingly:

Credit cards:

Chase 1: 90% (0% APR; limit $2,400)

Chase 2: 90% (0% APR; limit $6,800)

American Express 1: 85% (16.7% APR; limit $6,800)

American Express 2: 85% (0% APR; limit $2,000)

Capital One 1: 90% (0% APR; limit $4,000)

Capital One 2: 80% (17.2% APR; limit $4,600)

Store cards:

All 0% APR until 2017

Restoration Hardware : 85% (limit $7,500)

West Elm: 40% (limit $3,300)

Living Spaces: 80% (limit $5,000)

MA1: 0% utilization (limit $200)

What do you think, NRB25? Thanks.

Re: Need advice from 660 to 720+

Anonymous — Sun, 20 Mar 2016 17:28:39 GMT

If it were my debt, I'd be stair-stepping it down. This is what I'd do:

Get all the cards below the max threshold. I think that's 90%, so go 79-85 if possible, then attack the cards with interest.

If you can, pay double/triple the minimum on the others - that should help avoid red flags.

Pay off the cards charging interest as quickly as possible.

If you are okay with paying a little interest, once those go below 50% put more to the 0% cards to get those under 50%.

If any single card gets to the point where you can just pay it off while still keeping up with the payments on the others, do it - the less cards that report a balance the better.

I like the other poster's idea of using undebt.it - it helped me form a plan of attack when I had some debt that would take me a while to pay off.

Re: Need advice from 660 to 720+

NRB525 — Sun, 20 Mar 2016 17:57:13 GMT

The 0% APR helps on most of these cards.

One more question to consider: Do any of the Store cards, either Restoration Hardware, West Elm, or Living Spaces have the "gotcha" in their terms where, if you do not pay every last dime of the 0% amount, then ALL the prior deferred interest comes back to bite you? IF any of those three cards has terms that goes back to catch up all that deferred interest, that card is your #1 top priority to pay down to zero. That catch up interest can be a nasty surprise, again, even if you leave $0.10 on the account at the day the interest rate expires.

Regarding improving scores, my experience last June 2015 had all my accounts finally going below 50% utilization on any one card. As a result I saw a dramatic improvement in scores, from late May EQ 714 TU 727 EX 724 to early July EQ 756 TU 775 EX 765, so my suggestion is to get all cards, every card, so it is below 50% utilization as your #2 goal, after ensuring that #1 above (pay a Gotcha store card) is taken care of.

Thus the goal level is as outlined here. Once you get your scores improving, you should look into getting something like a Discover card, or Bank of America, which have regular BT offers. With a Discover card you can at least get a decent BT offer once all these 0% APR cards go to regular rates. Capital One has no-fee BT, but I have yet to see a BT offer for low APR.

Once you pay down the Capital One cards, one trick I have found is this:

BT $400 onto a Capital One card (regardless of APR). Make sure it starts at zero balance, no purchases, nothing else is going on in the card.

Set up autopayment of $225 per month.

In the first month, Capital One does not charge interest. Sweet! Auto pay picks up and pays $225 after this first statement.

Second statement, you are charged interest on the remainder after the $225. Autopayment gets the rest with that payment after the second statement.

With the final, third statement, Capital One does not charge any interest.

BT another $400 after this third statement prints, and start all over again, letting the autopay take over.

I've knocked off two sets of $400 amounts this way through my QS. When looking for a way to carve off high APR items, it's a viable option. You have two Capital One cards, so I'd look at driving those balances to zero first, so you have two avenues to carve out bits like this to reduce interest cost when the time comes.

Re: Need advice from 660 to 720+

Anonymous — Sun, 20 Mar 2016 19:28:16 GMT

@NRB525 wrote:
The 0% APR helps on most of these cards.

One more question to consider: Do any of the Store cards, either Restoration Hardware, West Elm, or Living Spaces have the "gotcha" in their terms where, if you do not pay every last dime of the 0% amount, then ALL the prior deferred interest comes back to bite you? IF any of those three cards has terms that goes back to catch up all that deferred interest, that card is your #1 top priority to pay down to zero. That catch up interest can be a nasty surprise, again, even if you leave $0.10 on the account at the day the interest rate expires.

Regarding improving scores, my experience last June 2015 had all my accounts finally going below 50% utilization on any one card. As a result I saw a dramatic improvement in scores, from late May EQ 714 TU 727 EX 724 to early July EQ 756 TU 775 EX 765, so my suggestion is to get all cards, every card, so it is below 50% utilization as your #2 goal, after ensuring that #1 above (pay a Gotcha store card) is taken care of.

Thus the goal level is as outlined here. Once you get your scores improving, you should look into getting something like a Discover card, or Bank of America, which have regular BT offers. With a Discover card you can at least get a decent BT offer once all these 0% APR cards go to regular rates. Capital One has no-fee BT, but I have yet to see a BT offer for low APR.

Once you pay down the Capital One cards, one trick I have found is this:
BT $400 onto a Capital One card (regardless of APR). Make sure it starts at zero balance, no purchases, nothing else is going on in the card.
Set up autopayment of $225 per month.
In the first month, Capital One does not charge interest. Sweet! Auto pay picks up and pays $225 after this first statement.
Second statement, you are charged interest on the remainder after the $225. Autopayment gets the rest with that payment after the second statement.
With the final, third statement, Capital One does not charge any interest.
BT another $400 after this third statement prints, and start all over again, letting the autopay take over.
I've knocked off two sets of $400 amounts this way through my QS. When looking for a way to carve off high APR items, it's a viable option. You have two Capital One cards, so I'd look at driving those balances to zero first, so you have two avenues to carve out bits like this to reduce interest cost when the time comes.

Sound advice. +100.

Re: Need advice from 660 to 720+

Anonymous — Mon, 21 Mar 2016 00:35:42 GMT

The only thing that I would add is that once you get that wad paid off your scores will have no trouble at all moving from 660 to 720.

Re: Need advice from 660 to 720+

Thomas_Thumb — Mon, 21 Mar 2016 01:46:50 GMT

@joshall wrote:
Dear fellow bloggers,

What would be the quickest way to raise FICO scores from 660 to 740?

8 months ago, we closed on a house and took on a car loan. We spent a tremendous amount of credit to purchase new furniture too.

My FICO scores plummeted to low 600's but it has steadily increased with the consistent minimum monthly payment (10 points per month). We don't have negative remarks, no late payments. Our constraint is very high utilization.

Here are our credit card utilization. We know they are quite high, so please don't judge.

RH: 85%
WE: 40%
LS: 80%
CC1: 90%
CC2: 90%
AE1: 85%
AE2: 85%
CA1: 90%
CA2: 80%
MA1: 0%

Any advice is greatly appreciated!

Thank you so much in advance.

Get all cards below 75% ASAP (although 90% is generally considered max out with greatest associated point loss).

Then PIF one or more hight interest, lower CL, cards to reduce the bleeding. Send the leeches somewhere else for their next meal.

https://www.youtube.com/watch?v=4QJt2BYkdiw

Stop feeding the banks. Good luck!

Re: Need advice from 660 to 720+

Anonymous — Mon, 21 Mar 2016 16:33:16 GMT

Probably the best (and most cost effective) advice if you want a rapid increase in your credit score is to consolidate your debt with a local credit union. We have one locally that does a seasonal uncollateralized loan for 9.5% APR - which is probably going to be lower than any cards you currently have. It will get you on a monthly payment schedule and reduce your utilization. Trying to get a 0% APR credit card is probably going to be extremely difficult considering your current utilization and credit score.