AMEX CLD Question

[masscredit]

She has a Cap1 account. I don't know the limit but don't think it's much. Maybe a few thousand. She will be paying off that and an equity LOC. Total will be around $48k.  The only bill she will have besides her mortgage will be the AMEX.  She's thinking about paying $500. on that to see what happens to her credit line. Paying off the LOC and Cap 1 should give her scores a boost.  Last time she checked her score it was about 520. 

[FinStar]

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@masscredit wrote:

She has a Cap1 account. I don't know the limit but don't think it's much. Maybe a few thousand. She will be paying off that and an equity LOC. Total will be around $48k.  The only bill she will have besides her mortgage will be the AMEX.  She's thinking about paying $500. on that to see what happens to her credit line. Paying off the LOC and Cap 1 should give her scores a boost.  Last time she checked her score it was about 520. 

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That's a pretty big dip on scores just from utilization alone.  Has your friend recently looked at her CRs to determine what else is driving such low scores?  Or, is it all due to high utilization?  Those scores need to rebound above 650 before AMEX can consider that any improvement (if at all).

[masscredit]

She had some life issues so the mortgage fell behind for awhile along with credit card payments, car payment and there might have been a tax lien too.  Don't know if there was a tax liens but if there is, it will be paid next week along with her car and the Cap 1. 

[Creditaddict]

1. She has $48k and she is not paying credit cards off first?

2. Under 600 score that Amex is going to be CLD to $500!

[09Lexie]

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@Creditaddict wrote:

1. She has $48k and she is not paying credit cards off first?

2. Under 600 score that Amex is going to be CLD to $500!

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If they keep it open.  How long has she been a member?

[masscredit]

Most of the $48k is being used to pay off an equity LOC on a house she just sold. Also paying off her car and Cap 1.  She's had the card for awhile, at least 5 years. 

[Creditaddict]

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@masscredit wrote:

Most of the $48k is being used to pay off an equity LOC on a house she just sold. Also paying off her car and Cap 1.  She's had the card for awhile, at least 5 years. 

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I again say at this point she can't worrya bout CLD or even the account being closed... she needs to think $$ and that is not at no 0%! Pay as much and as fast as she can and maybe next month she will have some score repond that allows her to get a new card and BT amex and then let the chips fall with rather they keep it or not but the best chance of that is paying it completely off.

[FinStar]

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@masscredit wrote:

Most of the $48k is being used to pay off an equity LOC on a house she just sold. Also paying off her car and Cap 1.  She's had the card for awhile, at least 5 years. 

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Your friend needs to retire that debt pretty quickly.  Unfortunately, right now she can't worry about what AMEX is going to do.  The card appears to be on a CLD course regardless.  If they close it, they close it.  If they keep it open but reduced to a CL the size of a tiny pond where a tadpole can barely survive, then so be it (it can eventually be reviewed in the future if so).  Not to paint a bleak picture but in some sense this is the reality of things.

Once all payments are satisfied and everything brought current, then your friend will need to work on rebuilding the history - slowly but surely.  Unfortunately, derogatory information puts a big dent on scores and history, but can be recovered with time.

[enharu]

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@FinStar wrote:

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@masscredit wrote:

Most of the $48k is being used to pay off an equity LOC on a house she just sold. Also paying off her car and Cap 1.  She's had the card for awhile, at least 5 years. 

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Your friend needs to retire that debt pretty quickly.  Unfortunately, right now she can't worry about what AMEX is going to do.  The card appears to be on a CLD course regardless.  If they close it, they close it.  If they keep it open but reduced to a CL the size of a tiny pond where a tadpole can barely survive, then so be it (it can eventually be reviewed in the future if so).  Not to paint a bleak picture but in some sense this is the reality of things.

Once all payments are satisfied and everything brought current, then your friend will need to work on rebuilding the history - slowly but surely.  Unfortunately, derogatory information puts a big dent on scores and history, but can be recovered with time.

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+1

It's best to just pay it off asap. No point paying unnecessary interests just because she's worried Amex will close the account. The longer she drags it, the more likely Amex is going to close the account.