topic Re: Best cc payoff strategy for fico boost in Understanding FICO® Scoring

Best cc payoff strategy for fico boost

Jbrun — Wed, 12 Oct 2022 21:25:27 GMT

Hey all, 1st time poster here so apologies in advance for any left out information that should be included or if I'm in wrong forum topics.

I am looking for the best strategy *for me* to pay down these cards over the next several months that will give me the most rapid boost short term while getting started. Ideally I’d love to get fico scores to 720 as quickly as possible and if possible by end of December or January. That gives me 3-4 billing cycles.

I currently have 3 credit cards:

1. NFCU Amex more rewards - 25k limit / 22k balance

2. NFCU Flagship rewards - $10.5k limit / 2.9k balance

3. NFCU platinum - $7k limit / $1.8k balance

I am looking to boost credit quickly and paying less interest is not a primary concern at the moment.

Current fico credit scores are:

684 equifax

692 transunion

691 experian

I will be paying down these cards as rapidly as I comfortably can over the next few months and to start I will have about 3k available to pay down per month.

I have read 2 main trains of thought here:

1. Pay all balances down to under 30% and then pay down based on highest interest rate.

2. Pay off or pay down to under 10% on 2 of the 3 cards and then start working on the higher balance.

- Which method or other method not mentioned here would best increase my score?

- Do you think it could produce at least a 20-25 point increase by Dec/Jan?

extra info:

- The only big negative credit items reporting are from student loans showing 4 separate loans and 4 separate late payments over 90 days from when they when into default. They have since been brought current and of course covid has halted mandatory payments so I plan to use that money for laying down cards until January and then loan forgiveness if approved will remove a large chunk of student loan debt and I'll carry on with normal payments.

- I also have hard pull inquiries from the last year since last November totaling 3 in all.

Thank you all for any help.

Re: Best cc payoff strategy for fico boost

CYBERSAM — Wed, 12 Oct 2022 21:41:18 GMT

You already going the right direction, so I would make it simple:

Pay minimum payment X2 on card 2 and 3 and pay remaining on card #1 Do this till they go under 30% and then payoff highest interest!

Re: Best cc payoff strategy for fico boost

FireMedic1 — Wed, 12 Oct 2022 21:44:56 GMT

@Jbrun wrote:
Hey all, 1st time poster here so apologies in advance for any left out information that should be included or if I'm in wrong forum topics.

I am looking for the best strategy *for me* to pay down these cards over the next several months that will give me the most rapid boost short term while getting started. Ideally I’d love to get fico scores to 720 as quickly as possible and if possible by end of December or January. That gives me 3-4 billing cycles.

I currently have 3 credit cards:
1. NFCU Amex more rewards - 25k limit / 22k balance
2. NFCU Flagship rewards - $10.5k limit / 2.9k balance
3. NFCU platinum - $7k limit / $1.8k balance

I am looking to boost credit quickly and paying less interest is not a primary concern at the moment.

Current fico credit scores are:
684 equifax
692 transunion
691 experian

I will be paying down these cards as rapidly as I comfortably can over the next few months and to start I will have about 3k available to pay down per month.

I have read 2 main trains of thought here:
1. Pay all balances down to under 30% and then pay down based on highest interest rate.
2. Pay off or pay down to under 10% on 2 of the 3 cards and then start working on the higher balance.

- Which method or other method not mentioned here would best increase my score?
- Do you think it could produce at least a 20-25 point increase by Dec/Jan?

extra info:
- The only big negative credit items reporting are from student loans showing 4 separate loans and 4 separate late payments over 90 days from when they when into default. They have since been brought current and of course covid has halted mandatory payments so I plan to use that money for laying down cards until January and then loan forgiveness if approved will remove a large chunk of student loan debt and I'll carry on with normal payments.
- I also have hard pull inquiries from the last year since last November totaling 3 in all.

Thank you all for any help.

Welcome @Jbrun

Pay off #2 and #3 first. Theres 2 months and apply the rest after that to tackle #1 until its done. You'll have less than 50% reporting. Lower aggregate util %. That will kick start the payoff. Dont use the cards until they're PIF.

Re: Best cc payoff strategy for fico boost

Jbrun — Wed, 12 Oct 2022 21:57:22 GMT

Thanks so much, one more question.

In terms of opening new credit card vs getting limit increase do you have any advice there?

The primary reason in the short term is for the credit boost making utilization lower but..

Sometime next year I have my eye on the Amex blue cash preferred but I am a newbie when it comes to what it takes to get approved for mid and top tier cards.

My only Amex card is the more rewards. Do I need to wait for it to be under 10% utilization before applying for that blue cash preferred or would I be better off applying for limit increase on one of my other cards? If limit increase, at what credit utilization ratio % would it be likely enough to get approved assuming my fico scores are all over 700 within 2 months.

Re: Best cc payoff strategy for fico boost

CYBERSAM — Wed, 12 Oct 2022 21:54:14 GMT

@FireMedic1 wrote:
@Jbrun wrote:
Hey all, 1st time poster here so apologies in advance for any left out information that should be included or if I'm in wrong forum topics.

I am looking for the best strategy *for me* to pay down these cards over the next several months that will give me the most rapid boost short term while getting started. Ideally I’d love to get fico scores to 720 as quickly as possible and if possible by end of December or January. That gives me 3-4 billing cycles.

I currently have 3 credit cards:
1. NFCU Amex more rewards - 25k limit / 22k balance
2. NFCU Flagship rewards - $10.5k limit / 2.9k balance
3. NFCU platinum - $7k limit / $1.8k balance

I am looking to boost credit quickly and paying less interest is not a primary concern at the moment.

Current fico credit scores are:
684 equifax
692 transunion
691 experian

I will be paying down these cards as rapidly as I comfortably can over the next few months and to start I will have about 3k available to pay down per month.

I have read 2 main trains of thought here:
1. Pay all balances down to under 30% and then pay down based on highest interest rate.
2. Pay off or pay down to under 10% on 2 of the 3 cards and then start working on the higher balance.

- Which method or other method not mentioned here would best increase my score?
- Do you think it could produce at least a 20-25 point increase by Dec/Jan?

extra info:
- The only big negative credit items reporting are from student loans showing 4 separate loans and 4 separate late payments over 90 days from when they when into default. They have since been brought current and of course covid has halted mandatory payments so I plan to use that money for laying down cards until January and then loan forgiveness if approved will remove a large chunk of student loan debt and I'll carry on with normal payments.
- I also have hard pull inquiries from the last year since last November totaling 3 in all.

Thank you all for any help.
Welcome @Jbrun
Pay off #2 and #3 first. Theres 2 months and apply the rest after that to tackle #1 until its done. You'll have less than 50% reporting. Lower aggregate util %. That will kick start the payoff. Dont use the cards until they're PIF.

@FireMedic1 You wouldn't be concern about other 2 cards get CLD or closed because of 1st card is going to show very high utilization for next few months?

That is may only issue with leaving high utilization reporting every month! Otherwise sure thing.

Maybe I'm still hunted by past experience!

Re: Best cc payoff strategy for fico boost

CYBERSAM — Wed, 12 Oct 2022 21:57:06 GMT

@Jbrun wrote:
Thanks so much, one more question.

im terms of opening new credit card vs getting limit increase do you have any advice there?

sometime next year I have my eye on the Amex blue cash preferred but I am a newbie when it comes to what it takes to get approved for mid and top tier cards.

my onky Amex card is the more rewards. Do I need to wait for it to hit under 10% before applying for that blue cash preferred or would I be better off applying for limit increase on one of my cards? Of limit increase, at what credit utilization ratio % would it be likely enough to get approved assuming my fico scores are all over 700 within 2 months.

Wait! Howmany other cards you have with balance? You may want to list others so we can get a better picture.

Re: Best cc payoff strategy for fico boost

Jbrun — Wed, 12 Oct 2022 22:00:17 GMT

Other than the cards and balances I listed The only other card I have is a 250 dollar limit secured card with usaa. I never use it but have had it for over a decade so I don't want to close it lol

Re: Best cc payoff strategy for fico boost

FireMedic1 — Wed, 12 Oct 2022 22:19:04 GMT

They're all with NFCU @CYBERSAM. Thats so rare. I cant remember the last time that AA happened with them. Getting under 50% reporting helps some. "Number of accounts reporting a balance"

Re: Best cc payoff strategy for fico boost

Jbrun — Wed, 12 Oct 2022 22:26:07 GMT

@FireMedic1 What is AA?

Re: Best cc payoff strategy for fico boost

FireMedic1 — Wed, 12 Oct 2022 22:38:27 GMT

@Jbrun wrote:
@FireMedic1 What is AA?

Adverse Action or accounts closed or CL reductions.

https://ficoforums.myfico.com/t5/User-Guidelines-General/Common-Abbreviations/td-p/88458

Re: Best cc payoff strategy for fico boost

Jbrun — Thu, 13 Oct 2022 00:31:30 GMT

Thanks again for the help.

Re: Best cc payoff strategy for fico boost

SouthJamaica — Thu, 13 Oct 2022 02:50:29 GMT

@Jbrun wrote:
Hey all, 1st time poster here so apologies in advance for any left out information that should be included or if I'm in wrong forum topics.

I am looking for the best strategy *for me* to pay down these cards over the next several months that will give me the most rapid boost short term while getting started. Ideally I’d love to get fico scores to 720 as quickly as possible and if possible by end of December or January. That gives me 3-4 billing cycles.

I currently have 3 credit cards:
1. NFCU Amex more rewards - 25k limit / 22k balance
2. NFCU Flagship rewards - $10.5k limit / 2.9k balance
3. NFCU platinum - $7k limit / $1.8k balance

I am looking to boost credit quickly and paying less interest is not a primary concern at the moment.

Current fico credit scores are:
684 equifax
692 transunion
691 experian

I will be paying down these cards as rapidly as I comfortably can over the next few months and to start I will have about 3k available to pay down per month.

I have read 2 main trains of thought here:
1. Pay all balances down to under 30% and then pay down based on highest interest rate.
2. Pay off or pay down to under 10% on 2 of the 3 cards and then start working on the higher balance.

- Which method or other method not mentioned here would best increase my score?
- Do you think it could produce at least a 20-25 point increase by Dec/Jan?

extra info:
- The only big negative credit items reporting are from student loans showing 4 separate loans and 4 separate late payments over 90 days from when they when into default. They have since been brought current and of course covid has halted mandatory payments so I plan to use that money for laying down cards until January and then loan forgiveness if approved will remove a large chunk of student loan debt and I'll carry on with normal payments.
- I also have hard pull inquiries from the last year since last November totaling 3 in all.

Thank you all for any help.

There is no valid "train of thought"; each person's situation is different.

In your case, the thing that's killing you is the Amex More Rewards. You need to throw everything you can spare at that card until you have it down to $12k. I.e. under 50%. When that happens you'll get a nice boost.

Once you've done that pay it down to $7k. When that happens you'll get another boost.

Once you've done that you can start zeroing out accounts, start with smallest balance first.

The advice you got from @CYBERSAM is correct.

Re: Best cc payoff strategy for fico boost

SouthJamaica — Thu, 13 Oct 2022 02:45:52 GMT

@Jbrun wrote:
Thanks so much, one more question.

In terms of opening new credit card vs getting limit increase do you have any advice there?

The primary reason in the short term is for the credit boost making utilization lower but..
Sometime next year I have my eye on the Amex blue cash preferred but I am a newbie when it comes to what it takes to get approved for mid and top tier cards.

My only Amex card is the more rewards. Do I need to wait for it to be under 10% utilization before applying for that blue cash preferred or would I be better off applying for limit increase on one of my other cards? If limit increase, at what credit utilization ratio % would it be likely enough to get approved assuming my fico scores are all over 700 within 2 months.

Since you're trying to get your scores up, applying for any new card is an absolute no no.

No CLI applications either unless you're absolutely sure it's a soft pull. I'm not up to date on what NFCU's present policy is on CLI requests.

BTW I don't think you'll get a CLI with your utilization so high on that More Rewards card.

Re: Best cc payoff strategy for fico boost

Jbrun — Thu, 13 Oct 2022 14:47:34 GMT

Awesome feedback @SouthJamaica on both comments.

This makes sense and you are a mega contributor so I'm gonna go with this lol. Also as cybersam commented about potential closing of an account or decreased cl on a card after paying off the smaller ones I'd rather not chance it even if it is rare at navy fed.

i will refrain from applying for any new credit or cli until all balances are under 30% and just go at increasing my score the safe and simple way.