topic Re: To Whom It May Concern (please read)..... in General Credit Topics

To Whom It May Concern (please read).....

_NERD — Tue, 04 Aug 2015 12:01:14 GMT

My Credit Situation

Bank of America Secured (AU on DW’s act)

$300 Limit
$248 Balance
Opened 3/18/2013
Never late

Capital One Secured

$326 Limit
$317.50 Balance
Opened 5/13/2015
Never late

Walmart SyncB (not MC)

$600 Limit
$561.67 Balance
Opened 5/22/2015
Never late

FEB-Retail / Genesis Credit (Ashley Furniture)

$6,000 Limit
$3,752 Balance
Opened 6/9/2015
Never late

Capital One QS1

$500 Limit
$498.34 Balance
Opened 6/24/2015
Never late

Jared (Galleria of Jewelry)

$1,901 Limit
$366.19 Balance
Opened 6/24/2015
Never late

Kay’s Jewelers

$2100 Limit
$565 Balance
Opened 6/24/2015
Never late

Credit Debt: $5,621

Total Credit: $11,427

Installment Account

CA Republic Bank

$11,071 Original loan amount (auto)
$10,755 Balance
Opened 5/29/2015

One late, 16 months old (last pmt on a credit builder loan at a CU).

No charge offs

No collection accounts

No BK

No PR's

No other derogatory

Fico 8 Scores from CCT (generated 8/2/2015)

EX 599

TU 595

EQ 601

Inquiries (all since 4/2015)

EX 13

TU 5

EQ 7

Story

Started my journey late April this year. I only had the BofA AU acct, nothing else. I learned everything I know from MyFico since April, and went on an app spree since I obtained the Cap1 Secured card in May. I was transfixed on my CK FAKO’s from the beginning and just learned how to obtain my FICO’s over the weekend. I’m just realizing I’m doing an awful job managing my new credit. I paid cash for everything I wanted since 2008-ish. I had lots of baddies on my CR's (30 accounts all bad) that have already fallen off my CR's. April was when I found myself with one tradeline, a couple satisfactory closed accounts, one late payment from early 2014, and a sudden desire to build credit.

I didn’t know the importance of keeping my utilization LOW and PIF if I needed to spend more, and repeat, until this past weekend. I basically explored MyFico threads silently & tried to do this on my own matter-of-factly, reading the experiences of some members and assumed it would work for me. I applied for the Cap1 QS1 because CK said my odds were GOOD. I guess I had good odds from the start in April when my EX Fico was 655. I have no idea what possessed me to get a secured CC, but I thought as long as I paid my accounts in full each time I made a payment, that was sufficient.

Anyway, I’ve officially been interacting in the forum since this weekend and learned a great deal by simply asking questions. I understand my utilization is ridiculous and I’m unsure what to pay off first, or how to spread out the payments. Both of my jewelry accounts are from the same creditor (Sterling). I just found out I can close one of the accounts, and the entire 4k credit limit will show up on one acct instead of spread out across 2 trade lines. Now I understand why my QS1 was approved for only $500 while my other cards were maxed out. Now I understand what "you've made heavy use of your credit" means. Thankfully I can start fresh when I pay my accounts off, because now I'm aware that utilization has no memory once I have zero or low balance (the situation I'm in today won't haunt me next month if I pay stuff down).

I felt it’s time to start a “my situation” thread to lay it all out in one post. I’m asking for advice and pointers. What do I do first to clean up the mess I’ve started to make?

Goals

700 Club
Get high CLI’s on my existing acts
Get a decent CC limit (new or existing)
Get a store card with high limit (Lowes, Barneys)
Healthy overall total credit limit
Purchase my first home

No timetable on a home purchase. That can wait a year or two. I’m happy in every other aspect of my life. I just want to get on the level many of you are already on. I don’t want to be in toy hell anymore with these cheesy credit limits/accounts. I’m done charging stuff on credit and buying unneeded stuff for now. I just want to do minimum spending until my FICO scores are optimized, as I'm becoming disciplined mentally for the long haul. Ask all the questions you want, and I'll provide additional information pertaining to whatever is relevant to this post.

Please and thank you.

~ inexperienced credit user

Re: To Whom It May Concern (please read).....

takeshi74 — Tue, 04 Aug 2015 12:13:46 GMT

You seem to be aware that revolving utilization is your issue. It helps to look at utilization for each account as well as overall.

248/300 = 83%

317.50/326 = 97%

561/67/600 = 94%

3752/6000 = 63%

498.34/500 = 100%

366.19/1901 = 19%

565/2100 = 27%

Overall: 6308.70/11727 = 54%

General advice is do not exceed 30%. Lower is generally better as long as you don't have all zeros reporting. Optimal -- i.e. when applying and you want to eke out every possible point -- is to allow only one balance to report at 10% or less. According to some allowing only $2 report on that account is truly optimal.

Tackle the higher utilization accounts first. Utilization isn't just a scoring factor but a risk factor as well. Short term high utilization generally isn't an issue but prologned high utilization can lead to adverse action such as credit limit decreases, balance chasing and even account closure. At this stage, score is the least of your concerns. Avoiding AA is your top priority and you want to to do so getting maxed (over 90%) accounts down ASAP. Get all accounts under 50% and then work on getting them under 30%. Get to where you're paid in full and paying in full each month.

If you're not budgeting then do so and stick to it so you're not accruing debt, subject to interest, and increasing your revolving utilization.

Look into addressing that late as well. Payment History and Amounts Owed are the two biggest factors

http://www.myfico.com/crediteducation/whatsinyourscore.aspx

so definitely work on the late and getting your revolvin utilization in check.

Re: To Whom It May Concern (please read).....

_NERD — Tue, 04 Aug 2015 12:16:13 GMT

takeshi74: thank you for taking the time to read & reply.

Re: To Whom It May Concern (please read).....

Anonymous — Tue, 04 Aug 2015 16:03:32 GMT

Wow! An end table and a nice ring and you'd be completely maxed out. Seriously get those amounts down! First, try to get reduce those above 90% and work on getting them all down overall. There are some good threads on MyFICO on different techniques. Getting the lowest out of the way first to reduce the number. Ie snowballing the payment onto the next.
Or paying them down by percentages etc.
Do some research on the forum and remember there are a lot of great people here that are good to get some solid advice from. Just ask.

Re: To Whom It May Concern (please read).....

_NERD — Tue, 04 Aug 2015 21:09:05 GMT

Ya it's ugly, but I'm not overwhelmed. Now I'm confident. I just typed up a spiffy GW letter in re: to the late payment. I also typed up 7 letters to have 9 inquiries deleted just now. All 7 of these inq del letters are going to PO boxes.

Does anyone know if CMRRR is possible on a PO box? I want to be able to use those in a future dispute with the CB's if they don't act within 30 days.

Thanks.

Re: To Whom It May Concern (please read).....

tufa4311 — Tue, 04 Aug 2015 22:53:18 GMT

I suggest consideration of a consolidation loan to clearout your credit card balances as this provides a number of positives:

- brings your UTIL straight down to zero

- lowers the interest you will be paying (credit card APR vs installment loan interest rate)

- raises credit score due to the huge UTIL drop

- creates a more manageable, structured, debt reduction plan - with credit cards you must only meet the minimum payments which are not set based on decreasing the amount of interest the consumer will pay. An installment loan has set montly payments that keep you focused on paying off the debt

That said, caution is required, you must have the fortitude to not run those cards back up as then you will have the loan debt as well as more credit card debt.

Re: To Whom It May Concern (please read).....

_NERD — Wed, 05 Aug 2015 05:13:41 GMT

Thanks. I'll look into it. I have several spare vehicles I no longer use and been meaning to sell. It won't be difficult to clean up my mess.

Re: To Whom It May Concern (please read).....

NY2014 — Sun, 09 Aug 2015 02:42:57 GMT

Hey Buddy Welcome to the forum, what (takeshi74) a very good path to follow only think I and other would add: Patience!! It takes time, rebuilding Credit is not a race !

That being said, There is lots of support and knowledge here. from my experience over a yr ago wasn't that far off until I found myfico.com family forum .

Good luck, stay with it .. and congrats on your steps

Re: To Whom It May Concern (please read).....

Anonymous — Sun, 09 Aug 2015 08:00:50 GMT

@takeshi74 wrote:
You seem to be aware that revolving utilization is your issue. It helps to look at utilization for each account as well as overall.
248/300 = 83%
317.50/326 = 97%
561/67/600 = 94%
3752/6000 = 63%
498.34/500 = 100%
366.19/1901 = 19%
565/2100 = 27%

Overall: 6308.70/11727 = 54%

General advice is do not exceed 30%. Lower is generally better as long as you don't have all zeros reporting. Optimal -- i.e. when applying and you want to eke out every possible point -- is to allow only one balance to report at 10% or less. According to some allowing only $2 report on that account is truly optimal.

Tackle the higher utilization accounts first. Utilization isn't just a scoring factor but a risk factor as well. Short term high utilization generally isn't an issue but prologned high utilization can lead to adverse action such as credit limit decreases, balance chasing and even account closure. At this stage, score is the least of your concerns. Avoiding AA is your top priority and you want to to do so getting maxed (over 90%) accounts down ASAP. Get all accounts under 50% and then work on getting them under 30%. Get to where you're paid in full and paying in full each month.

If you're not budgeting then do so and stick to it so you're not accruing debt, subject to interest, and increasing your revolving utilization.

Look into addressing that late as well. Payment History and Amounts Owed are the two biggest factors
http://www.myfico.com/crediteducation/whatsinyourscore.aspx
so definitely work on the late and getting your revolvin utilization in check.

+1 - very good advice!

Re: To Whom It May Concern (please read).....

Anonymous — Tue, 11 Aug 2015 23:30:40 GMT

Good luck, you can do it. ^_^

Re: To Whom It May Concern (please read).....

Thomas_Thumb — Wed, 12 Aug 2015 23:58:15 GMT

@ShortBus wrote:
My Credit Situation

Credit Debt: $5,621
Total Credit: $11,427

Installment Account

CA Republic Bank
$11,071 Original loan amount (auto)
$10,755 Balance
Opened 5/29/2015
One late, 16 months old (last pmt on a credit builder loan at a CU).
No charge offs
No collection accounts
No BK
No PR's
No other derogatory

Fico 8 Scores from CCT (generated 8/2/2015)
EX 599
TU 595
EQ 601

Inquiries (all since 4/2015)
EX 13
TU 5
EQ 7

I felt it’s time to start a “my situation” thread to lay it all out in one post. I’m asking for advice and pointers. What do I do first to clean up the mess I’ve started to make?

Goals
700 Club
Get high CLI’s on my existing acts
Get a decent CC limit (new or existing)
Get a store card with high limit (Lowes, Barneys)
Healthy overall total credit limit
Purchase my first home
No timetable on a home purchase. That can wait a year or two. I’m happy in every other aspect of my life. I just want to get on the level many of you are already on. I don’t want to be in toy hell anymore with these cheesy credit limits/accounts. I’m done charging stuff on credit and buying unneeded stuff for now. I just want to do minimum spending until my FICO scores are optimized, as I'm becoming disciplined mentally for the long haul. Ask all the questions you want, and I'll provide additional information pertaining to whatever is relevant to this post.

Please and thank you.

~ inexperienced credit user

Here are some suggestions and comments:

1) You have plenty of credit cards - allow your accounts to stabilize (Don't apply for any new accounts or CLIs at this time), It would be best to let your youngest inquiries reach at least 6 months age before requesting any CLIs - you will qualify for higher CLIs when your accounts show more stability and your scores improve

2) Pay down highly utilizrd cards to below 80% (max out benchmark) ASAP and to below 50% when practical.

3) Bring aggregate (overall) credit card utilization to below 20% if possible. Don't need to worry about getting to 10% utilization at this stage of the game - incremental benefit going from over 50% to under 20% is large. Gain going from under 20% to under 10% is small in comparison.

4) Reduce # cards reporting a non zero balance in a given month from 7 to 3. You will see a benefit from this. Many folks will advise dropping to one card reporting a balance ... but don't worry about that score optimization tactic until much later in the game when you need a new loan.

Once you have accomplished the above then go for some targeted CLIs.

Re: To Whom It May Concern (please read).....

_NERD — Thu, 13 Aug 2015 00:31:29 GMT

Thanks I'm trying. Might return my Tempurpedic mattress to the store to bring down my utilization on the big account. I have just over a month left to return it.

That's messed up huh? (=

Re: To Whom It May Concern (please read).....

_NERD — Sun, 16 Aug 2015 07:04:21 GMT

UPDATE:
Sold one of my spare cars today and brought my balances down a bit today, most under 50%. My furniture store account is still above 50%. Ugh, I can't see myself charging furniture ever again.

Re: To Whom It May Concern (please read).....

_NERD — Tue, 01 Sep 2015 17:23:57 GMT

UPDATE:
My scores went north!

Re: To Whom It May Concern (please read).....

Anonymous — Wed, 02 Sep 2015 01:38:11 GMT

Hey SB! So happy for you that things are improving and that you are developing a PLAN. Awesome. Twenty zillion congrats.

In your initial post you wrote:

"I’m done charging stuff on credit and buying unneeded stuff for now. I just want to do minimum spending until my FICO scores are optimized, as I'm becoming disciplined mentally for the long haul."

You are getting some great advice in the thread so far, especially as people try to give you the big picture, e.g. "your big issue is utilization."

I am going to go out on a limb and suggest that the deepest issue you have (and I was in your shoes too years ago) is not maxxing out credit cards or whatever. Those are symptoms of a still deeper problem which is buying stuff you don't need. Even if you manage to get your CC debt paid off, you will always be at risk of it ballooning back up until you can identify the triggers and dysfunction that come from searching for happiness in the act of spending. It will involve a gradual restructuring of your neural pathways but it will be in the long run immensely profitable (literally and otherwise) to begin finding joy in things that are comparatively low-cost or free: going for a walk or a run in the park, reading a book, watching a movie from the ton of stuff that is available now via a cheap service like Netflix, etc. Furthermore you will find that you can eventually get huge pleasure from the opposite of spending, which is saving. The same rush you got from buying stuff you can, if you work at it, get from the disciplined act of repeatedly refusing to buy, and instead watching your IRA and 401k and rainy day fund grow.

So here's my advice, for what it is worth. As you say, be done with buying unneeded stuff -- but cut the words "for now." Explore what it might be like to make this a fundamental and permanent shift in how you approach money, pleasure, and life. If you do that, the credit score stuff will take care of itself.

Re: To Whom It May Concern (please read).....

Anonymous — Wed, 02 Sep 2015 14:46:42 GMT

Excellent advice from everyone. Good luck on your credit journey.

Re: To Whom It May Concern (please read).....

Anonymous — Thu, 03 Sep 2015 02:30:56 GMT

You are on your way! Agree that the advice is great. My 2 cents: Do your best to stay on course to get those balances erased-of course that isn't easy- and good things (and scores) will follow from the habits and mind-set required to do it. Congrats on the start and good luck!

Re: To Whom It May Concern (please read).....

_NERD — Fri, 01 Apr 2016 08:46:58 GMT

Update: I haven't fogotten about you all. Credit scores and CL's updated in my sig.

I have 3k tax refund coming in a couple week. The only revolving account that won't be PIF is my Feb Retail account (Ashley Furniture/Genesis). The good news is that my furniture account is under 50% util, and that's with a $1100 living room set we charged to the account in November. Had to, we needed a new couch.

The credit union we have that 30 day late with (2 yrs old last month) gave us the finger last year when I sent them a GW letter. I sent another GW letter last month. Next week I'll send another letter with a bunch of movie passes and Starbucks gift cards & see if that does the trick.

I anticipate our FICO 8 scores will clear 700 across the board 30-40 days after the tax refunds wipe out those CC balances. As soon as the PIF's report to the CR's, we are going to begin working with a direct lender - after we pull our 3B ultimate FICO package that includes our mtg scores. I've been over on the mortgage side of the forum absorbing all the pertinent information available. Pretty soon I'll rotate the FICO 8 scores out of my sig & replace it with the Trifecta scores.

I negotiated a PFD off wife's credit reports. The collection agency happens to be located here in town. I fired the payment off in the mail last friday via CMRRR. They were quick to sign for the payment and DW got the final letter. Any day now the account will be deleted.

Walmart Sync auto CLI'd me to 900 last month, from 700, and the util was 90%+.

Cap 1 secured CLI to 626, unsecured. I only deposited 226 I think. I didn't request the CLI

Cap 1 QS1 CLI to 1500. That was the offer when I clicked the love button. I should've turned it down.

My friend owns a dealership I purchased my car from last May. I also took a hard pull in Oct for a 2nd vehicle but we declined the contract due to sticker shock at the last minute. He was nice enough to have all the hard pull inq's deleted from our CR's for us. I'm also going to write a letter to my auto loan bank to request them to delete the hard pulls also. If they give us the finger, so be it. I actually just want to be able to remove my gold spade in my sig and put a palladium or higher spade, since my next most recent HP will go back to last June (=

I NEVER charged anything to my jewelry accounts again. I sold those Citizen Eco Drive watches to pay down my balances I've got 1 payment left on each of those accounts, then they're PIF.

Other than that 30 day late from 2 years ago, dropping our util is all that needs to be done. I have no desire to apply for credit anytime soon. Not even after the home loan closes. I hope to be in our new home this Spring dammit.

Thank you all very much for everything you've shared with me over the last year.

Re: To Whom It May Concern (please read).....

Anonymous — Fri, 01 Apr 2016 18:25:45 GMT

I am happy to hear things are starting to look up for you (other than the Walmart CLD, but that can be fixed down the road). Thanks for the update!

Re: To Whom It May Concern (please read).....

_NERD — Fri, 01 Apr 2016 18:44:21 GMT

@Anonymous wrote:
I am happy to hear things are starting to look up for you (other than the Walmart CLD, but that can be fixed down the road). Thanks for the update!

Thank you, and you're welcome.

WalMart wasn't a CLD. That was a $200 CLI. I think when I originally started this post, my CL was $600. A couple statements in, they auto CLI'd me to $700. I was hoping to break 650 TU this month, so I can request a CLI. Ugh.