topic Re: paying off 107% utilization on cc in Rebuilding Your Credit

paying off 107% utilization on cc

MsTucker09 — Sat, 24 Sep 2011 15:06:17 GMT

Good morning everyone. Yesterday I took the bold step to get my Eq FICO score. It was higher than I expected 462 YIKES!!!!!. Just 2yrs ago my credit score was almost 700. Long story short my husband was laid off from his 90k a year job so we got behind on bills because my income is only 60k.

So my cr looks like this: 107% utilization on cc (because WFNNB decreased my credit limit from 1800 to 349 because I had a late payment in July). So all in all i have $3306 in credit card debt, collection from AT&T from 9/2011...which I sent PFD which they agreed to honor on Monday when the payment is processed. Also have 60day late with macys from june 2011 and 30 day late with VCF (I have sent gw letters for both of them) and an old collection from asset acceptance that I paid in 2008 and have sent them a gw letter as well.

When I did the how to increase your FICO score simulator, it said if I pay off all my cc debt I could see and increase in my score of 100 pts!!!! Which is great because I am getting ready to be in a definite need for a new car I would like to buy before the end of the year. My question is my husband is going to get a 10k check from his former employer in approx 2 wks and I wanted to know if I should take 3k of that money and pay off my cc debt pr should I just see if I get any reesults from the gw letters to increase my credit score? Any advise would be appreciated. Thanks

Re: paying off 107% utilization on cc

haulingthescoreup — Sat, 24 Sep 2011 16:29:33 GMT

I would say pay off your CC's. High util is such a score killer, even on clean reports, and maxed-out is even worse. Since you're able to kill off the balances, I'd do so. You might or might not get 100 points --the sim isn't Gospel.

Any GW results will be gravy.

In fact, it might even help your GW's to show that you don't owe a lot any more. They might be more willing to think that your problems were a one-time thing. (Complete speculation, though.)

Re: paying off 107% utilization on cc

Anonymous — Sat, 24 Sep 2011 18:39:48 GMT

I agree with HTSU. Paying down/paying off the CC debt is the fastest way to increase your score. But IMO just as important is the interest you are paying each month will decrease as you pay down these balances.

I know how real life gets in the way of our plans but try as hard as you can to put every extra dollar towards paying down balances.

From a BK years ago to:
EX - 3/11 pulled by lender- 835, EQ - 2/11-816, TU - 2/11-782

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".

Re: paying off 107% utilization on cc

MsTucker09 — Sat, 24 Sep 2011 18:39:57 GMT

Okay thank you I will pay off those balances and hopefully my gw letters will work as well to boost my scores

Re: paying off 107% utilization on cc

RobertEG — Sun, 25 Sep 2011 07:34:04 GMT

They have already cut the CL on the card. That is an indication that they are seeing increased risk on the card that they are not willing to continue.

If the balance is not reduced, they may deem it necessary to take additional action, such as closing the account.

Credit scoring impacts would not be my sole concern.

Re: paying off 107% utilization on cc

MsTucker09 — Sun, 25 Sep 2011 08:36:08 GMT

@RobertEG wrote:
+1
They have already cut the CL on the card. That is an indication that they are seeing increased risk on the card that they are not willing to continue.
If the balance is not reduced, they may deem it necessary to take additional action, such as closing the account.
Credit scoring impacts would not be my sole concern.

They decreased the credit limit after 1 30 day late in the 5 1/2 yrs I have had the card!!!

Re: paying off 107% utilization on cc

haulingthescoreup — Mon, 26 Sep 2011 03:57:56 GMT

@MsTucker09 wrote:
@RobertEG wrote:
+1
They have already cut the CL on the card. That is an indication that they are seeing increased risk on the card that they are not willing to continue.
If the balance is not reduced, they may deem it necessary to take additional action, such as closing the account.
Credit scoring impacts would not be my sole concern.
They decreased the credit limit after 1 30 day late in the 5 1/2 yrs I have had the card!!!

They also no doubt softed your credit reports and saw that you were struggling with other cards as well, so they took action.

Re: paying off 107% utilization on cc

MsTucker09 — Mon, 26 Sep 2011 04:42:08 GMT

when they do a soft pull on your cr isn't it indicated on your cr? Also could the companies that I have great standing with do that also to decrease my cl?

Re: paying off 107% utilization on cc

MsTucker09 — Mon, 26 Sep 2011 04:47:05 GMT

So now in the am I am going to pay them 750 so my acct can have a zero balance and I won't have to deal with WFNNB anymore. Ugh I'm so frustrated now

Re: paying off 107% utilization on cc

haulingthescoreup — Mon, 26 Sep 2011 13:39:56 GMT

@MsTucker09 wrote:
when they do a soft pull on your cr isn't it indicated on your cr? Also could the companies that I have great standing with do that also to decrease my cl?

Softs show up on your individual full reports --those that you get directly from the credit bureaus, either your free annual pull or paid-for --but they don't show up on reports that you get from credit monitoring services, including myFICO. So if you have a credit monitoring service, from Experian for instance, those reports won't show softs, but if you pay EX for a one-time full report, it will.

(Sorry, still working through my coffee, so I know that's a bit incoherent. )

It's always possible that other lenders could decide to CLI you as well if they think that you're risky.

Re: paying off 107% utilization on cc

haulingthescoreup — Mon, 26 Sep 2011 13:43:31 GMT

@MsTucker09 wrote:
So now in the am I am going to pay them 750 so my acct can have a zero balance and I won't have to deal with WFNNB anymore. Ugh I'm so frustrated now

I hear ya.

FWIW, I had a massive string of lates (30's and 60's) several years ago with WFNNB/ J.Crew after an ill-advised power struggle with my kids as to who was going to pay the bill. (Dumb, dumb, dumb.) I paid them all, but there they sat, hurting my credit.

After a while, I gritted my teeth and started using the card again. Not only did they start giving me CLI's, they removed the lates when I finally got up the courage to call and ask for GW. The CSR told me that since my account had been fine for two years, they were happy to remove them. I didn't have to write a letter or anything.

Re: paying off 107% utilization on cc

CS800 — Mon, 26 Sep 2011 14:10:19 GMT

I agree , utilization being 30% of your score is killing you.

My util is currently at 75% and once I save some money to at least bring it to 50%, the score sim said I should gain anywhere between 30 to 40 pointsl now imagine if I can bring my util below 10%?

The sim is just an estimate to be used cautiously without getting overexcited.

Re: paying off 107% utilization on cc

MsTucker09 — Mon, 26 Sep 2011 16:52:58 GMT

@CS800 wrote:
I agree , utilization being 30% of your score is killing you.
My util is currently at 75% and once I save some money to at least bring it to 50%, the score sim said I should gain anywhere between 30 to 40 pointsl now imagine if I can bring my util below 10%?

The sim is just an estimate to be used cautiously without getting overexcited.

Yea I know im just trying to be optimistic because I want to get my score in the 600s in a year so I can buy a new car without needing a co signer or paying 20% in interest

Re: paying off 107% utilization on cc

CS800 — Mon, 26 Sep 2011 18:12:45 GMT

@MsTucker09 wrote:
@CS800 wrote:
I agree , utilization being 30% of your score is killing you.
My util is currently at 75% and once I save some money to at least bring it to 50%, the score sim said I should gain anywhere between 30 to 40 pointsl now imagine if I can bring my util below 10%?

The sim is just an estimate to be used cautiously without getting overexcited.
Yea I know im just trying to be optimistic because I want to get my score in the 600s in a year so I can buy a new car without needing a co signer or paying 20% in interest

Not an easy task I know; I've been there and still rebuilding but a job loss can be very devastating.

Finding this forum was (is still) a big 'support group' for me. You get the guidance of the 'veterans' who themselves prob have been there. Just keep faith that you will get there; the journey might be long but you will succeed. As you know try to get your util down within your means. I'm saving up so I can at least bring my util down between 35-50%.

Re: paying off 107% utilization on cc

MsTucker09 — Mon, 26 Sep 2011 18:19:40 GMT

@CS800 wrote:
@MsTucker09 wrote:
@CS800 wrote:
I agree , utilization being 30% of your score is killing you.
My util is currently at 75% and once I save some money to at least bring it to 50%, the score sim said I should gain anywhere between 30 to 40 pointsl now imagine if I can bring my util below 10%?

The sim is just an estimate to be used cautiously without getting overexcited.
Yea I know im just trying to be optimistic because I want to get my score in the 600s in a year so I can buy a new car without needing a co signer or paying 20% in interest
Not an easy task I know; I've been there and still rebuilding but a job loss can be very devastating.

Finding this forum was (is still) a big 'support group' for me. You get the guidance of the 'veterans' who themselves prob have been there. Just keep faith that you will get there; the journey might be long but you will succeed. As you know try to get your util down within your means. I'm saving up so I can at least bring my util down between 35-50%.

i know thankfully my DH was able to get a settlement from his union for being laid off and he is in the process of filing a suit against his company so we have been able to manage and our finances are getting alot better so we are on a road to redemption. His credit is 10x worse then mine so we are gonna work on improving mine and then work on his. But this forum was helpful 3yrs ago when we were getting our credit fixed to buy our dream home and now we are trying to fix it all over again so it was disappointing at first but now I KNOW that I will repair my credit and I am goig to pay off all my cc next month!! I already paid my WFNNB/VCF card off completely today so only $2500 left in cc debt