topic Re: hello, credit help please?? in General Credit Topics

hello, credit help please??

Anonymous — Wed, 06 Jul 2011 15:26:48 GMT

Me and my husband are looking to buy a car but our real issue is everyone keeps denying us. What can we do to raise our credit scores from 630ish to high 700s?

Here's our debts (recently paid off a bunch), should we close those???

Paid off but open:	Balance Due	Credit Limit	Min Pmt
Macys	$ -	$ 500.00	$ -
Kays Hubby	$ -	$ 1,250.00	$ -
Von Maur	$ -	$ 750.00	$ -
USB Adv	$ -	$ 500.00	$ -
Zales Hubby	$ -	$ 1,000.00	$ -
Capital One	$ -	$ 750.00	$ -
Best Buy	$ 168.54	$ 300.00	$ -
Amazon	$ 98.00	$ 900.00	$ -
Zales Me	$ 1,483.63	$ 1,450.00	$ 58.00
Kays1	$ 2,270.00	$ 2,700.00	$ 140.00
NFM	$ 2,446.43	$ 2,500.00	$ 98.00
Hubby GM Card	$ 4,991.51	$ 5,000.00	$ 120.00
Flex	$ 4,924.00	$ 5,000.00	$ 98.00
Plat Card	$ 5,155.62	$ 7,500.00	$ 130.00
Travel Card	$ 3,374.29	$ 5,000.00	$ 98.00

Re: hello, credit help please??

laz98 — Wed, 06 Jul 2011 15:54:05 GMT

several of your cards are close to maxed out. i wouldn't close a thing right now, because it can only hurt you.

start paying those balances as fast as you can! your credit utilization, how much of your available credit you are using, is a huge part of your score. having several cards close to their limits is really hurting you. once you get them down you will see a big difference. i don't think it will be over 100 points, but guesstimates are not my area.

Re: hello, credit help please??

Anonymous — Wed, 06 Jul 2011 16:01:43 GMT

+1. I agree with Laz.

It would also help a ton if you separated you and your DH's cards into two separate lists. That will help you know what to attack next and in what order. You'll want to watch overall utilization, individual utilization, as well as number of accounts reporting a balance - FICO pays attention to all of those. And, of course, you will want to weigh APR's as you pay down. Are either of you AU's on each other's cards? If so, that balance is showing up on both CR's and you may want to consider pulling the AU off.

Oh, and welcome sarahkay1985! This is a great place - Glad to see you on the boards and posting here!

Re: hello, credit help please??

llecs — Wed, 06 Jul 2011 16:13:42 GMT

Welcome to the forums!

Did they say why they denied the car loan? A 630 FICO isn't that bad. Could your debt-to-income ratio been an issue? Excluding housing which needs to be factored (in the eyes of your lender), your monthly obligations as posted is about $750/mo. Add rent or mortgage and divide both into your monthly gross and that percentage could have put you over their comfort level. On the flip side, paying down revolving, as you are doing, will reduce the DTI and improve your FICO at the same time.

If my math is right, your utilization is 72% assuming ALL of the cards reporting $0 are currently open. This is taking your listed balances and dividing them into the CL. This calc. excludes Macys which does not factor into utilization because they don't report a CL. I'm assuming here that your other CCs are reporting a CL as listed. I bet if you paid down all of your CCs to $0 and left one with a small balance of under 9% of the CL, then you'd see a gain of 60-90+ points. You have at least one CC that is over the limit and there's an extra FICO ding due to that. Once paid down and report as such, you'll see some nice gains and you would likely reach 700. BTW, this is assuming your 635 already factors in your paid balances, which they might not at this point. Your scores could be higher once those report. FICO likes $0 balances (and lenders too) so I personally would focus on the smaller balances first.

I would only close the cards if they charge a fee. Otherwise, I'd leave them open and use every 3-4 months for a pack of gum or for a $4 cups of coffee at Starbucks. PIF of course and remain debt free (per CCs). Also, once you close a $0 balance CC, it is forever removed from FICO scoring per utilization, so I personally wouldn't recommend closing them until after the car purchase.

ETA..............dag gum, I'm a slow typer. Stupid work activities interferring with my slow typing skills.

Re: hello, credit help please??

Anonymous — Wed, 06 Jul 2011 16:22:56 GMT

good point on the DTI llecs!

Re: hello, credit help please??

p- — Wed, 06 Jul 2011 16:30:29 GMT

@Anonymous wrote:
Me and my husband are looking to buy a car but our real issue is everyone keeps denying us. What can we do to raise our credit scores from 630ish to high 700s?

Here's our debts (recently paid off a bunch), should we close those???

You owe almost 25,000 dollars in credit card debt. Your problem isn't the number of cards, it's your utilization. You should pay off more of these if you want to look less likely to default. Best is if all are 0 balance except one has 3 to 9%. You should also look at the rest of your credit report. If there are Collections, Lates, or other derogs that could prevent you from getting auto financing you need to GW, PFD, or do what it takes to clear them.

I don't know what your financial situation is, but if you can get by with the wheels you have until you pay these off and clean up your report you'll be much better off. I recommend you commit to spending 12 months doing that, including reading here to find out how to improve your credit. Make sure you pay off the highest interest cards first. Then, at the end of 12 months the inquiries you have will be gone, and hopefully you have a better utilization picture.

At that time go to your credit union or bank and get a pre-approved loan for a car. Take that with you to car shop, and you'll get a better deal.

Credit is a game of patience and perserverance. Waiting until you are in a better position will put you way ahead of the game in the future.

Good luck!

Re: hello, credit help please??

Anonymous — Fri, 08 Jul 2011 00:00:54 GMT

thanks everyone, yea we make 38000 and 35000.. our house payment is 980 a month... we afford everything comfortably but really want to buy a car.. they say revolving balance is too high... i already know that.. i've been working on paying a lot of them off... should I pay each of them half off instead of working on paying one in full every time?

Re: hello, credit help please??

Anonymous — Fri, 08 Jul 2011 00:04:36 GMT

If there are Collections, Lates, or other derogs Nope, absolutely no lates or collections ever on either of our credit files. His score is 663 and mine is reported above. I have a lot more credit in my name then he does though.

Re: hello, credit help please??

Booner72 — Fri, 08 Jul 2011 00:37:46 GMT

Hi SarahKay -- I'll tell you what my scores did and maybe that will help. I had 4 cards maxed out. I paid down to 31% and only got 10 points. What I have read here says to pay as many as possible to zero to increase points. If I were in your shoes, I would nail one at a time, getting them down that way. But that's just me and maybe somone else has a different opinion.

However, I am sure I am in a different scoring bucket than you are because I have lots of derogs and you have clean credit.

Good Luck.

Re: hello, credit help please??

p- — Fri, 08 Jul 2011 14:23:19 GMT

@Booner72 wrote:
Hi SarahKay -- I'll tell you what my scores did and maybe that will help. I had 4 cards maxed out. I paid down to 31% and only got 10 points. What I have read here says to pay as many as possible to zero to increase points. If I were in your shoes, I would nail one at a time, getting them down that way. But that's just me and maybe somone else has a different opinion.
However, I am sure I am in a different scoring bucket than you are because I have lots of derogs and you have clean credit.

Good Luck.

From what I've read, the key utilization buckets are Less than 10% and Less than 30%. It's my understanding that until you get below 30% utilization you won't see the benefits in your score, then the next major jump will come when you get bleow 10.

I can tell you I've seen my score drop significantly if I show greater than 10% utilization on my revolving lines... So it stands to reason that reducing it would help you.

Re: hello, credit help please??

Anonymous — Fri, 08 Jul 2011 15:40:00 GMT

So P you suggest to pay down 70% on every one of those first? then work on paying them in full afterwards?

Re: hello, credit help please??

GregB — Fri, 08 Jul 2011 15:44:01 GMT

Any CC with util over 80% seems to be considered "maxed out". I would get all CC below 80% of their individual limit. Actually less than 79%.

There is also seems to be a negative with over 50% of your open Revolving Accounts with a balance. This may not matter if you only have 2-3 accounts but, as an example, if you have 10 accounts you want 6 or more to be reporting $0. With lots of accounts I have seen more movement with that change than large changes in overall utilization. Lately I have seen no change from overall util of 63% down to 38%.

These steps seem to be more universal than steps at certain overall utilization. Some people see movement at 50% or 30% but some people don't.

I know some people that do manual reviews on loans who have commented that having a balance on a jewelry store card is a red flag. Your car loan application might not even be getting a manual review.

Re: hello, credit help please??

Booner72 — Sat, 09 Jul 2011 02:16:33 GMT

Hi Sarah - I'm going to hijack your post for just a quick second to get -P's opinion on something.....I am a big fan of -P by the way. Maybe the reply will help you, also, which I hope.

So anyway, my lovely mentor, you said "Then the major jump will come when you get below 10% utilization" --Please define "major jump" for someone with a "dirty file." (hate that term btw).-- I need 16+ points to get to 640 by early next week. We're doing rapid rescore, I'm leaving 50 bucks on one of four cards. Last neg. was 2/10 when judgment posted. Other than that clean credit over 2 yrs.

thanks.

Re: hello, credit help please??

slarano — Sun, 10 Jul 2011 05:23:56 GMT

I'd attempt to pay down each card one by one. First, I would obviously pay off the smallest of your balances, as another $0 balance card can't hurt, especially when it'll take less than $300 to get two of your cards to $0 balance. Second, I would attack whichever balance has the highest APR. If you have any cards that have been known to give BT offers, try paying down that card first. Once it's close to, or at $0 balance, your ccc might offer you a BT deal, at which point you can take full advantage of that. Even if they don't, it's still another card with a $0 balance! Good luck!

Re: hello, credit help please??

Anonymous — Mon, 11 Jul 2011 14:47:25 GMT

Just paid off another, the Zales card is now zero'd out.....

I have balances on jewerly cards because I just got married two months ago. We have $1200 each month to pay down on debts. We allocate $200 a week for our food/gas/etc and the rest goes to paying off our debt.

Re: hello, credit help please??

Anonymous — Mon, 11 Jul 2011 14:48:50 GMT

oops I forgot to add that we both have Billmelater accounts, do those ever report to credit?

Re: hello, credit help please??

Anonymous — Mon, 11 Jul 2011 15:51:23 GMT

ok here is what actually shows up on just my credit report.... I've paid off $2053 on revolving which has not posted to my report yet.

Score currently shows on Equifax as 601... yikes.... the other one was an experian score.

CREDIT REPORT as of 07/11/2011

Open Accounts	Total#	Balance	Available	Credit Limit	Debt to Credit	Monthly Payment Amount	Accounts with a Balance
Mortgage	1	$117,402	$4,352	$121,754	96%	$995	1
Installment	1	$9,749	$2,148	$11,897	82%	$290	1
Revolving	10	$10,759	$3,191	$13,950	77%	$267	6
Other	0	$0	N/A	N/A	N/A	$0	0
Total	12	$137,910	$9,691	$147,601	93%	$1,552	8

Re: hello, credit help please??

slarano — Mon, 11 Jul 2011 17:11:00 GMT

BillMeLater does not report trade lines, but does have a habit of hard pulls whenever you make a BillMeLater purchase. Inquiries hurt! Start paying down your revolving as quickly as possible, you'll see larger jumps at 50% util. then at 30% then eventually at 10%.

Re: hello, credit help please??

Anonymous — Mon, 11 Jul 2011 17:41:36 GMT

What really is weird is this, my husband's score is 629, both of us have no lates and no judgements and he has more outstanding credit but his score is higher??? Credit is wack.

CREDIT REPORT as of 07/11/2011

Open Accounts	Total#	Balance	Available	Credit Limit	Debt to Credit	Monthly Payment Amount	Accounts with a Balance
Mortgage	1	$117,402	$4,352	$121,754	96%	$995	1
Installment	1	$9,749	$2,148	$44,488	82%	$742	1 (has error, closed acct 454 per month, credit limit should be $11897.00)
Revolving	7	$16,350	$1,727	$18,077	90%	$309	6
Other	0	$0	N/A	N/A	N/A	$0	0
Total	12	$143,501	$98,227	$184,319	78%	$2,046	8

Re: hello, credit help please??

slarano — Mon, 11 Jul 2011 17:48:38 GMT

The sooner you educate yourself about, and embrace, credit, the sooner you can better your credit profile and better your life. I'm guilty of it as well, but now I know that the only way to make it better is to emerse yourself, and not look at credit as if it's only a hindrance. In reality, it can be one of our biggests personal assets.