topic Re: Utilization Help in Rebuilding Your Credit

Utilization Help

Anonymous — Sun, 14 Jul 2019 16:18:02 GMT

Hello,
I started repairing in Feb and have PFD all collections and gotten nearly everything cleaned up. My FICO8 is 601

I’m left with two positive CC
Amex: 100% utilization
Chase: 90% utilization

Synchrony Bank: two paid CO listing $0 balance, closed status. I am using goodwill saturation method on the long shot I can get these removed

Now that all collections are paid and deleted, I’ve got funds to pay off my cc balances in full but am unsure if that’s best way to raise score or if utilization should be 10% for best scores.

Also, Synchrony is reporting the following:
Account Status: Closed
Payment Status: Charge Off
Balance: $0
Is this the most favorable way for them to report or should the payment status be Paid Charge Off? Would that help score?

Re: Utilization Help

gdale6 — Sun, 14 Jul 2019 19:21:28 GMT

@Anonymous wrote:
Hello,
I started repairing in Feb and have PFD all collections and gotten nearly everything cleaned up. My FICO8 is 601

I’m left with two positive CC
Amex: 100% utilization
Chase: 90% utilization

Synchrony Bank: two paid CO listing $0 balance, closed status. I am using goodwill saturation method on the long shot I can get these removed

Now that all collections are paid and deleted, I’ve got funds to pay off my cc balances in full but am unsure if that’s best way to raise score or if utilization should be 10% for best scores. By all means pay them off so you incur no further interest then you want one of them reporting 9% or less of its CL to the CRAs each month.

Also, Synchrony is reporting the following:
Account Status: Closed
Payment Status: Charge Off
Balance: $0
Is this the most favorable way for them to report or should the payment status be Paid Charge Off? Would that help score? DOesnt matter and leave it alone you dont want an update as it would drop your Fico score. They know its paid off with 0 balance.

Re: Utilization Help

Anonymous — Sun, 14 Jul 2019 20:47:32 GMT

You're losing quite a bit of points for having both individual and total utilization maxed out.

What else is left on your report to clean up?

Re: Utilization Help

Anonymous — Sun, 14 Jul 2019 22:06:41 GMT

Thanks for your response

Re: Utilization Help

Anonymous — Sun, 14 Jul 2019 22:17:13 GMT

@overmedicated

Nothing. I only have the two open cc's Chase and Amex and the two paid Charge Offs. I have some closed paid in full cc's from a few years ago and one 30 day late on the chase from 3 years ago. The Amex account is 20+ years old and the Chase 10+.

My wife had a medical emergency in 2016 that had us over our head for a bit but we're pretty solid now.

I should mention that I went from 523 on 2/15/19 to 601 current with my Fico8 (Experian). I was able to delete collections associated with the charge offs and there was some info that was inaccurate and deleted in dispute. We want to move soon and plan to rent a home in our area so I am trying to get to 650 or above and as clean as possible.

Re: Utilization Help

BallBounces — Sun, 14 Jul 2019 22:29:13 GMT

As the others have said, you should essentially pay both cards off*.

* If I were in your shoes, I would follow that up (next month or two) with opening ONE new prime card. Make it secured if need be. Not a store card (with a few rare exceptions), not a sub prime, not a club tradeline, but a prime credit card. Then, you will potentially be in position to eke out a few marginal points using AZEO as you let the derogitories age.

Re: Utilization Help

HighAchiever — Mon, 15 Jul 2019 02:52:48 GMT

Congrats OP for working on bettering you credit profile! I agree with the above and would also suggest paying both credit cards in full. If you had a 3rd credit card, as the previous member suggested, you could take advantage of the AZEO method to help your scores as the accounts age further and your other negative items also age and eventually fall off the report. Also generally speaking, when not using the AZEO method, try and stay under 30% utilization for the reported balance of the available credit limit for each card.

Re: Utilization Help

FireMedic1 — Mon, 15 Jul 2019 13:42:57 GMT

@HighAchiever wrote:
Congrats OP for working on bettering you credit profile! I agree with the above and would also suggest paying both credit cards in full. If you had a 3rd credit card, as the previous member suggested, you could take advantage of the AZEO method to help your scores as the accounts age further and your other negative items also age and eventually fall off the report. Also generally speaking, when not using the AZEO method, try and stay under 30% utilization for the reported balance of the available credit limit for each card.

With 2 cards at $0 come statement date. FICO is not a fan of that. Having 1 card report $10 is at 50% on the border. So leaving 1 PIF and 1 @ $10 wont take points away. Having both at $0 will ding the scores. You are correct when the OP hits 3 cards and follow AZEO. Then its at 33.3% and thats under the border of 50% and will help boost the score. Depending on what badies are still hurting.

The dont use over 30% of the credit line isn't really true thats plastered all over the net. CCC's and FICO don't watch that. Some CCC's want heavy usage and pay it down. They make money that way. The CCC's want to be paid on time the lower the statement (util) the better and FICO counts whats reported at statement date. FICO only cares what's reported and not what the percentage was used during the month.

Re: Utilization Help

dynamicvb — Mon, 15 Jul 2019 13:52:01 GMT

Definitely get those balances paid down to one under 9%. That will likely help a good bit. You did not mention any installment loan, you are losing some points there too. Might want to look at self lender or one of the other SSL options to correct the mix. How old are your open tradelines now? That would drive me whether I would open another account now. You don't want your average falling too low if they are fairly recent.

Re: Utilization Help

Anonymous — Mon, 15 Jul 2019 14:08:41 GMT

Thanks so much everybody!

Both credit cards are pretty old - Amex is 25+ years and Chase 13+. We bought our cars with cash and last home we owned was 14 yrs ago so loan is no longer reporting.

What are thoughts on following the 86%, 66%,46%,26%,6% ... schedule to pay down the balances in an effort to keep my limits high and not be balance chased. Amex limit is $17,600 and Chase is $9200.

I have two goals :
1. short term (30-45 days) - raise my score and look like a good tenant gamble. Kiddos school is keeping us in this neighborhood for one more year, then free to purchase elsewhere
2. Long term (2-3 years) - buy house

My wife and I are solid now but 2016-2018 had us dealing with her medical emergency (4 surgeries) and the death of both my parents - while financially supporting them through cancer diagnoses. That’s why util is so high. We’ve never been here before and we’ve sold my parents home so we’ve got 6 months salary saved and still have more than enough to climb out.

Re: Utilization Help

FireMedic1 — Mon, 15 Jul 2019 15:07:15 GMT

You'll want to get the balances down as quickly as possible so no high balance clock starts that would lead to balance chasing. If they already have it in the background to do so. Not much to do but plead your case why the balances were high. But lets think positive. Pay them down and get some points back for now.

Re: Utilization Help

dynamicvb — Mon, 15 Jul 2019 16:23:12 GMT

I would think there would be less chance of being balanced chased if they got paid down sooner and not increments if you are able, but not sure. I've never been chased so I don't have any first-hand knowledge. Might want to look add some small loan or SSL to fix that mix. When I only had loans( and a quite a few baddies too) and then added a card, then I jumped between 40-50 points across the 3 CRA's. I'm not sure if going from 0 loans to 1 would be the same as with cards or not, but I'm sure its good for a few points. Getting those balances down and a loan would likely be good to get you in the high 6's if not 7's

Re: Utilization Help

Remedios — Mon, 15 Jul 2019 17:07:14 GMT

It's easy to check and see if balance chasing is about to happen

Make a larger payment and see if your limit changes. If it does, it's hard coded and it wont stop till lender decides so.

Sometimes it stops on it's own, other times it keeps up till the account is closed.

I would be more concerned with Amex than Chase, so test waters with amex and see what happens

If they do start with balance chasing, I suggest you call and find out if there is any particular amount you need to pay for it to stop.

If that's an option, Amex rep will inform you.

Chase, while as prone to balance chasing as anyone loves the interest payments, so if you can get that balance down, you can probably save that card