topic My AA chances in General Credit Topics

My AA chances

Anonymous — Sun, 13 Jun 2021 05:19:20 GMT

So I have a huuuuugeeeeee expense I just had to pay for. Expense was about 40k. Took out a 20k personal loan and put the rest on some credit cards than moved it over to a few zero balance bt offers. My income is about 60k, my dti will be about 29% with everything reporting which includes an auto lease. The debt can be repaid in 2 yrs tops. I have no mortgage so basically I have the cash to throw at the debt but I'm wondering if this will spook every creditor? Ficos in low 700s perfect payment history, even with the debt 14% utilization, 4 year history with infinity 24 lol many paid in full personal loans. Entire debt on report 50k with lease

Re: My AA chances

Anonymous — Sun, 13 Jun 2021 05:20:19 GMT

Absolutely no problem paying a little more than minimum payments might I add

Re: My AA chances

FinStar — Sun, 13 Jun 2021 22:41:18 GMT

It would largely depend on how this will impact your CRs, individual/overall utilization, score deterioration (if any) and any lenders that are known to be fairly sensitive to significant fluctuations associated with sudden debt acceleration. Who are your lenders and how are these balances spread out?

Re: My AA chances

Anonymous — Sun, 13 Jun 2021 05:51:47 GMT

so I have the following:

penfed 3 credit cards 15k out of 20k used highest individual utilization 86% on 2 of them 0% bits

2 discover cards

sychrony Amazon and lowes

Bmo platinum

4 BBVA cards and 1 with a 5550 bt 0% about 80% utilization on one card rest pif
2 American Express cards 1k limit each lowest

1 Langley card

the build card But kinda predatory but oldest account

Wells Fargo tempurpedic just pif carried bal for 2 years recently pif

mazda financial 14k debt auto lease 1 year old and bow under 10k

loads of inquiries and new accounts but still getting approvals and cli top utilization will be about 14% have over 100k in credit, I'm just concerned about the debt total being almost my income but like I said no mortgage and dti will be under 30%, just one of those life things came up and had to spike debt quickly but I'm hoping these facts won't spook everyone especially since I'm not In a position where I cant pay everything each month easily thx for the feedback

Re: My AA chances

Anonymous — Sun, 13 Jun 2021 05:52:47 GMT

And the rest of the 20k on a personal loan 450 a month

Re: My AA chances

SouthJamaica — Sun, 13 Jun 2021 10:22:56 GMT

@Anonymous wrote:
So I have a huuuuugeeeeee expense I just had to pay for. Expense was about 40k. Took out a 20k personal loan and put the rest on some credit cards than moved it over to a few zero balance bt offers. My income is about 60k, my dti will be about 29% with everything reporting which includes an auto lease. The debt can be repaid in 2 yrs tops. I have no mortgage so basically I have the cash to throw at the debt but I'm wondering if this will spook every creditor? Ficos in low 700s perfect payment history, even with the debt 14% utilization, 4 year history with infinity 24 lol many paid in full personal loans. Entire debt on report 50k with lease

It could indeed "spook" creditors so pay it down as fast as possible.

Re: My AA chances

Anonymous — Sun, 13 Jun 2021 11:04:14 GMT

@Anonymous wrote:
Absolutely no problem paying a little more than minimum payments might I add

What do you mean by "little more than minimum payments"? This statement conflicts with your other comments about throwing money at the debt and paying it off in 2 years. A little more than minimum payments doesn't support either of those statements.

Furthermore, paying only the minimums or just barely above minimum payments is a good way to push those lenders that may take AA to do so. Few lenders want to see a huge debt incurred with little progress at paying it off.

Re: My AA chances

PackAttack07 — Sun, 13 Jun 2021 13:13:57 GMT

I think you should be fine as long as you do not increase balances on other accounts. Don't let cards you PIF report a big balance even if you're about to pay it off next month - pay it ahead of time. And absolutely stop applying for new credit that is probably what will trigger AA at this point.

The reason is "bust-out" fraud. There are bust-out risk scores and you will absolutely be on the radar given you not only raised your balances but opened that personal loan. The next month or two will be critical; pay your balances before the statement end date so they report $0 and banks that are nervous don't think you're running everything up to zero then will disappear (bust-out fraud).

The real question in my opinion (assuming you stop applying for cards and don't let big balances get reported) is at what point can you resume credit seeking activites. Of course, rule #1 is pay down your new massive balances as much as possible. But if you're doing that 6 months from now can you safely apply for a new card or two? I'd say probably, depending on the issuer. But if you have 5 new inquiries show up over the next 3 months you are going to be 100/100 bust-out risk and the AA cascade could start.

You probably know this but be careful with 0% intro offers and balance transfers... you can get lulled into a sense of complacency and not pay down those debts, only to find yourself in the same situation 18 months from now. If you responsibly pay down that new debt and are aware of what data points banks are seeing (as it seems you are by your question), I think you'll be fine.

Re: My AA chances

Anonymous — Sun, 13 Jun 2021 14:52:49 GMT

@Anonymous so it would be double the minimum payments on the cards, sorry to sound contradictory but for example the minimum on a 5500 Bal is $110 so paying double that didn't seem like much more lol so my plan is to pay the minimum on the personal loan and pay about 650 a month towards the cards. I get a decent tax return each year so I I'm just gonna throw the whole thing at the card debt in early 2023 then start throwing that money at the loan with me putting my return money towards the loan in 2024

Re: My AA chances

Anonymous — Sun, 13 Jun 2021 13:53:00 GMT

Ya that was my thoughts about the bust out fraud def don't want that. That's what I've been doing for awhile like I pay before the statement prints for most cards, I'm assuming the bust out fraud thinking would go away though after a few months of seeing double the minimum payments and payments on the loan, Thoughts?

Re: My AA chances

Anonymous — Sun, 13 Jun 2021 14:16:42 GMT

Meant early 2022 for the cards then early 2023 for loan

Re: My AA chances

PackAttack07 — Sun, 13 Jun 2021 16:26:40 GMT

Tough to say as I've only had one experience with AA (knock on wood) and it was BofA. The event that triggered the adverse action was applying for 2 new cards with 2 other issuers (significant >$20,000 in new CL). That was despite me having my highest credit score in years at the time and never having missed a payment. BofA closed my Premium Rewards card that I PIF for 2 years as soon as I paid the annual fee and cut the credit limit on my other card to just above the balance at the time (which was at 0% APR btw). Concurrently, I had let my total utilization get as high as 54% (highest in 2 years) accidentally. Just going from 49% to 54% coupled with the two new accounts did it (could've been either one). When I called in and showed them 50% increase in income, reduced (but still high overall) balances, and new utilization of 42%, they didn't care.

That's a whole other story how that happened (don't call BofA when it says to call in the balance transfer page online), but suffice to say those two new accounts must've been what got me. I had significant balances on other cards too though - more than yours - all at or just expring 0% (hence why I applied). This was despite me having paid down debt before/after - they didn't care even when I called to complain to higher ups. It was a business decision and I respect that - they'll also have to respect that I will never use them again for anything personal or business related, so they've lost a HENRY for life (the story is ridiculous how it went down).

So my honest opinion is if you're going to carry large balances, be prepared for adverse action when opening new accounts in particular. I would not advise opening any new accounts anytime soon, and avoid inquiries or other credit seeking behavior unless you really need it.

Re: My AA chances

AverageJoesCredit — Sun, 13 Jun 2021 21:22:33 GMT

@Anonymous wrote:
so I have the following:
penfed 3 credit cards 15k out of 20k used highest individual utilization 86% on 2 of them 0% bits
2 discover cards
sychrony Amazon and lowes
Bmo platinum
4 BBVA cards and 1 with a 5550 bt 0% about 80% utilization on one card rest pif
2 American Express cards 1k limit each lowest
1 Langley card
the build card But kinda predatory but oldest account
Wells Fargo tempurpedic just pif carried bal for 2 years recently pif
mazda financial 14k debt auto lease 1 year old and bow under 10k
loads of inquiries and new accounts but still getting approvals and cli top utilization will be about 14% have over 100k in credit, I'm just concerned about the debt total being almost my income but like I said no mortgage and dti will be under 30%, just one of those life things came up and had to spike debt quickly but I'm hoping these facts won't spook everyone especially since I'm not In a position where I cant pay everything each month easily thx for the feedback

Irregardless if debt can be paid back in 2 years, that big of a jump in debt can easily result in AA or have consequences just because we are in a sensitive time period with lenders looking for the slightest sign of trouble, perceived or not. Road to hell was paved with good intentions and so can a lenders goodwill

Re: My AA chances

Anonymous — Sun, 13 Jun 2021 23:10:24 GMT

Fingers crossed it doesn't result in disaster but honestly it's got me a bit paranoid

Re: My AA chances

FinStar — Mon, 14 Jun 2021 00:28:18 GMT

@Anonymous wrote:
Fingers crossed it doesn't result in disaster but honestly it's got me a bit paranoid

You'll just have to monitor things periodically and see what happens, if anything.

From the list of lenders you shared, those that can potentially take some form of Adverse Action would be (in order of reported DPs): SYNCB, Discover, BBVA and BMO. AmEx could CLD as well, but it appears you might have the lowest CL on both revolvers.

Re: My AA chances

Anonymous — Mon, 14 Jun 2021 03:35:20 GMT

Thx for the responses, the credit game can be strange, you get all these lines and then when it's time to use it for something like this then it's time to worry. All I can do is watch out for any closures, I'm assuming if it does it'll probably happen extremely fast once everything reports

Re: My AA chances

Anonymous — Sat, 26 Jun 2021 19:39:23 GMT

Everything is reporting and no AA yet "fingers crossed"

Re: My AA chances

FinStar — Sat, 26 Jun 2021 23:27:59 GMT

Glad to hear but just keep in mind sometimes AA is not always instantaneous. Some lenders monitor activity for a while so just keep an eye on things for the next few months.