topic Re: Not sure where to go from here in General Credit Topics

Not sure where to go from here

derboesekoenig — Sun, 29 Jul 2018 19:02:42 GMT

Ok background time. Here's what I'm working with:

NFCU- started initial accts (DD,chk,sav) in 2015

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Visa Signature CashRewards- $7,900 limit, opened Dec 1, 2016

More Rewards Amex- $20k limit, opened Oct 22, 2017

Visa Platinum- $6,400 limit, opened Feb 11, 2018

USAA

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$550 secured card- opened Nov 6, 2017

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Delta Gold Amex card- $1000 limit, opened Nov 28, 2017

My last credit report (for July), I had at or near 100% util. for all cards except $0 on the Delta Amex, and $323 balance on the USAA card.

Current situation is that everything is at $0 balance--all paid in full.

When should I go for a CLI and for which cards? Other advice?

Also reported last month-

Lending Point unsecured loan, opened Jan 23, 2018, for $23,738

Balance was $21,848

*This was a 36 month loan that I paid off in full about a week ago*

State subsidized loans

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2 that I paid in full this month; previously read as *120-149 days late*

Each were between $7k-$8k when opened, and opened in 2011. Total payoff amount for both was around $1700

Fedloan student loans - broken up into 4 separate loans

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Carry a $10k balance, but paid on time every month since May 2014 (except one late payment)

Should I just payoff ASAP or keep active? Other advice?

So as you can see, I had some personal things going on and I assume everyone is going to say, just be patient. I also want to be proactive and do what I can, so really any help would be appreciated.

Thank you!

Re: Not sure where to go from here

derboesekoenig — Sun, 29 Jul 2018 19:11:45 GMT

I also have a total of 4 hard inquiries reading on my report:

Dec 16

Oct 17

Feb 18

Jan 18

Not sure how that is going to affect my score, ability for CLI, etc.

Re: Not sure where to go from here

Anonymous — Sun, 29 Jul 2018 19:26:44 GMT

Where do your FICO scores stand now? I think i would probably try to reestablish a payment history by using each card each month for the next 3 months, and PIF all but one. Let that one report a small balance ($20-30) each month. This is known as AZEO (all zero except one) and has shown to maximize FICO scores. Do that and show all your lenders that the bad times are gone and you’re using and paying right, then go for the CLI you want. I’d also contact the creditor with whom you were late and ask for a goodwill deletion of that late payment record to restore your history on that account.

Re: Not sure where to go from here

derboesekoenig — Sun, 29 Jul 2018 19:56:19 GMT

My FICO scores are very low. I believe around 500. I will update this thread as soon as they are updated, which should be sometime in the next week.

I will use each card and do the AZEO strategy you suggest, and we shall see what happens

Since the only ones I've been late on are state subsidized loans, do they allow goodwill deletions?

Re: Not sure where to go from here

derboesekoenig — Sun, 29 Jul 2018 22:02:39 GMT

I know credit karma isn't transunion/experian, but I used their score simulator, and current score (504) to a 0% utilization shows a jump to 628. So essentially if I did that plus the 2 (well, 3 technically) loan payoffs, it should be 628+ correct?

Re: Not sure where to go from here

Anonymous — Sun, 29 Jul 2018 22:24:49 GMT

Very hard to say since there is no way to directly translate the VS scores to FICO. Once everything updates, get a free pull from www.annualcreditreport.com and get your FICOs currently.

Re: Not sure where to go from here

Anonymous — Sun, 29 Jul 2018 22:48:47 GMT

@Anonymous wrote:
Very hard to say since there is no way to directly translate the VS scores to FICO. Once everything updates, get a free pull from www.annualcreditreport.com and get your FICOs currently.

Your annual reports are free but I believe you have to pay for the score.

Re: Not sure where to go from here

Anonymous — Mon, 30 Jul 2018 03:45:13 GMT

You believed correctly, report only.

Re: Not sure where to go from here

Anonymous — Mon, 30 Jul 2018 04:59:03 GMT

@derboesekoenig wrote:

State subsidized loans
-------------------------------
2 that I paid in full this month; previously read as *120-149 days late*

It sounds like you might be under the impression that having paid off the two state loans will cause the 120 Day lates to go away. If so, this is a mistake. The two loans will be marked as paid in full but the two severe lates will not go away. They will remain there for approx 7 years after the date of delinquency.

Re: Not sure where to go from here

Anonymous — Mon, 30 Jul 2018 05:10:05 GMT

It looks like you have paid off three loans and may be considering paying off more, under the impression that the payoffs will improve your FICO 8 score. This is not true. The payoffs are much more likely to hurt your score than to help it. Far better is to pay loan balances down but not pay them off completely.

If you tell us the following things we may be able to make some informed guesses as to the effect that the payoffs may have:

For the loans that you recently paid off, what was the balance just before payoff and the original loan amount? List them as:

Loan 1. Balance before payoff = ____ Original loan amount = ____

Loan 2. Balance before payoff = ____ Original loan amount = ____

Loan 3. Balance before payoff = ____ Original loan amount = ____

For the loans that are still open, list them with current balance:

Loan 1. Balance = ____ Original loan amount = ____

Loan 2. Balance = ____ Original loan amount = ____

Loan 3. Balance = ____ Original loan amount = ____

etc.

Re: Not sure where to go from here

Anonymous — Mon, 30 Jul 2018 05:15:42 GMT

@derboesekoenig wrote:
I know credit karma isn't transunion/experian, but I used their score simulator, and current score (504) to a 0% utilization shows a jump to 628. So essentially if I did that plus the 2 (well, 3 technically) loan payoffs, it should be 628+ correct?

One of the other contributors (ImTheDevil) warns that a 0% utilization is not ideal and will hurt your score compared to having a 1% utilization. I strongly recommend you take ImTheDevil's advice and have exactly one credit card report with a small positive balance. FICO will round this up to 1%.

Re: Not sure where to go from here

Anonymous — Mon, 30 Jul 2018 05:20:46 GMT

You mention that your chief interest is in CLIs. Although there is no harm in seeing if you can get CLIs, bigger credit limits will not in themselves improve your scores at all -- not even one point. That's just an FYI in case you were thinking that the bigger CLs would improve your score.

Re: Not sure where to go from here

derboesekoenig — Mon, 30 Jul 2018 15:15:50 GMT

Loan 1. Balance before payoff = 21,848 Original loan amount = 23,738

Loan 2. Balance before payoff = 787 Original loan amount = 7639

Loan 3. Balance before payoff = 845 Original loan amount = 8190

I know that initially it won't improve my score, but I was thinking over a short time period, it would

I left a 1-3% balance on one card. Is that best, or to keep a 1-3% balance on all cards?

And I know the late payments will not go away for a very long time. Is there any way for me to inquire to someone about them to get them to disappear before the 7 years though?

Also, CLIs are not my chief interest. End goal is of course a 790-800 score, and 800+ FICO. I realize this may take years, but I need to learn to be patient. CLIs along the way? Sure, I wouldn't mind...

Re: Not sure where to go from here

Anonymous — Mon, 30 Jul 2018 21:43:42 GMT

@derboesekoenig wrote:
Loan 1. Balance before payoff = 21,848 Original loan amount = 23,738
Loan 2. Balance before payoff = 787 Original loan amount = 7639
Loan 3. Balance before payoff = 845 Original loan amount = 8190

I know that initially it won't improve my score, but I was thinking over a short time period, it would
I left a 1-3% balance on one card. Is that best, or to keep a 1-3% balance on all cards?

And I know the late payments will not go away for a very long time. Is there any way for me to inquire to someone about them to get them to disappear before the 7 years though?

Also, CLIs are not my chief interest. End goal is of course a 790-800 score, and 800+ FICO. I realize this may take years, but I need to learn to be patient. CLIs along the way? Sure, I wouldn't mind...

Thanks. We also need the current balance and original loan amount for all your open loans. We can't assess the impact of your loan payoffs without knowing that as well.

Your score will be maximized with all cards at zero except one (AZEO). The one card should have a small positive balance: $10, $15, whatever.

Re: Not sure where to go from here

derboesekoenig — Mon, 30 Jul 2018 22:13:21 GMT

Ok so besides those 3 that are listed and all the cards, the fedloans/school loans are as follows:

1. Current balance- 2523 Original loan- 3000

2. Current balance- 3628 Original loan- 4500

3. Current balance- 2568 Original loan- 2986

4. Current balance- 1792 Original loan- 2250

Re: Not sure where to go from here

Anonymous — Mon, 30 Jul 2018 23:50:08 GMT

After the payoffs....

The total amount you owe on your open loans is $10,511.

The total original loan amounts on the open loans is $12,736.

That means your current installment utilization is 10511/12736 = 82.5%.

Before the payoffs....

The total amount you owed on your open loans was $33,991.

The total original loan amounts on the open loans were $52,303.

That means your installment utilization was 33991/52303 = 65%.

The loan payoffs have caused your installment utilization has to go up, which has probably lost you some scoring points. Certainly it gained you no scoring points.

Furthermore, if you had kept all seven loans open, but paid the loans down by the same $23,480 amount, then....

The total amount you owed on your open loans would be $10,511.

The total original loan amounts on the open loans would still be $52,303.

That means your installment utilization would be 10511/52303 = 20%.

An IU of 20% would be much better, and you'd be much closer to a TIU of 8.99% where you would get even more scoring points.

Re: Not sure where to go from here

derboesekoenig — Mon, 30 Jul 2018 23:59:27 GMT

Ah I see. I should've just paid them all down equally and not paid any off.

Well too late for that. The good thing is that I won't need a loan for at least the next year. Maybe 2ish years. Hopefully it doesn't more than 2 years to get it to at least 750+, if I stay consistent, correct?

Re: Not sure where to go from here

Anonymous — Tue, 31 Jul 2018 00:27:58 GMT

Here the best next steps for you, in chronological order.

(1) Have one card reporting a positive balance. Wait until all three bureaus show all cards at zero except one. If you need help finding some free tools to pull your three reports, let us know.

(2) Pull your three FICO 8 scores. This will give you a baseline of where you are after you have done as much as you can in the short term.

(3) Develop a financial plan that will prevent you from ever going into CC debt again. The plan will necessarily involve saving a bunch of money to protect you in case of emergencies.

(4) After you have been paying all your accounts regularly for several months, start a strong letter writing campaign to have the Day 120 lates removed. Also the other late, but if it is a Day 30 late you will get no help unless the Day 120 lates are removed. The Day 120s will severely hurt your score until they are removed.

The letter writing campaign is explained in more detail in posts that describe Goodwill Letters The Saturation Technique.

Re: Not sure where to go from here

derboesekoenig — Tue, 31 Jul 2018 00:51:55 GMT

Thank you for all the help. I will follow those steps. Just have to be patient

Re: Not sure where to go from here

Anonymous — Tue, 31 Jul 2018 01:56:48 GMT

Amex will give you your experian fico 8 score in your online account. (free)

You can also request 3x your current limit for an increase. $1k x 3 = $3000