Advice for next steps

Anonymous · ‎06-19-2018

Hi all, long-time lurker here, looking to get some guidance on what my next steps in my rebuild should be. Apologies in advance for the length.

Some background: I'm in my mid-20s, and my oldest card (from 2015) went from a Capital One Platinum with a $300 SL, to a $4300 Quicksilver. All was well until moving out on my own and a poorly planned vacation lead me to max the card out around two years ago. I let the payments go for three months, but after a call from them threatening closure of the account, I have not missed any payments since. IT now sits at a $5300 CL after an unrequesed increase late last year.

Long story short, I took some tips I had read on here, but I admit now my choices were a little short-sighted. I tried to pad utilization to increase my score enough to qualify for a decent balance transfer, which was somewhat successful, but now I worry my profile is spread too thin and would like some pointers.

Current cards:

CapOne Quicksilver: Opened 2015 - 2500 balance / 5300 credit line (will be able to pay this in full in the next month or two)

Amex Delta Gold: Opened 2017 - 400 / 1000 (PIF every month)
CapOne Platinum: Opened 2018 - 0 / 500 (didn't research transfer terms, rendering it a useless HP and new acct, want to roll this into Quicksilver after Credit Steps increase)

J. Crew: Opened 2018 - 0 / 750 (SCT, wanted util padding)

Citi DoubleCash: Opened 2018 - 1300 / 1500 (0% until August 2019)

My partner has added me to his Amex BCE (opened last month, $7000 SL), which will only be used for groceries, PIF every month.

As I said above, I will be able to pay off the QS balance in full within a few weeks, and I have learned my lesson on overspending more than a few times over. Moving forward, I'd like to maximize my cash back, eventually applying for the Discover It and PCing the QS to a Savor.

With that, a few questions:

I have no use for the Platinum and J. Crew cards. Should I just close them immediately, or let them age for a bit?

I'll hold on to the Delta Gold at least through the first year, as I do fly with them a couple times a year. I tried for the 3x CLI to no avail. With my outstanding balance basically evaporating, will I be more likely to receive one? I plan on using this as my daily driver until the DC is paid off.

How long should I wait to apply for Discover It? I currently prequal for the student version, but don't want to get stuck with a low limit.

Current AAoA: 2.3 years
Utilization: 46% (will be 26% when BCE starts reporting)

Lates: 60D ~ 1/2016, 120D ~ 7/2016

Scores: EQ 599 (per Citi)

EX 629 (per Amex)

TU FAKO 642 (per CK)

Thanks for reading, any input is appreciated!

HeavenOhio · ‎06-19-2018

Welcome, @Anonymous.

Ride it out with the Capital One Platinum until you can get the steps increase and combine.

Combining the Capital One cards and dropping JCrew will still leave you with the three cards that'll give you the scoring advantage of being able to have less than half of your cards with positive balances. I'd close JCrew once your QS is paid off.

As far as applying, I'd get your balances down first. Pay off the QS, and bring the DC balance down considerably — at least to 48.9% utilization or below — or better, 28.9% or below.

NRB525 · ‎06-19-2018

OP with your clear outline of where you are, and what is affecting your scores, that goes a long way to help you make progress.

As you now know, the most important thing you can do is always pay on time. Credit is a marathon and eventually you will see improvement.

I would not worry about closing cards, even the Delta, since you will get benefit out of it on flights.

Pay down the balances. The next phase of your situation is to understand clearly how much you are paying in interest, and thus how much you will save once it is paid off

High Bal Jan 2009 $116k on $146k limits 80% Util.
Oct 2014 $46k on $127k 36% util EQ 722 TU 727 EX 727
April 2018 $18k on $344k 5% util EQ 806 TU 810 EX 812
Jan 2019 $7.6k on $360k EQ 832 TU 839 EX 831
March 2021 $33k on $312k EQ 796 TU 798 EX 801
May 2021 Paid all Installments and Mortgages, one new Mortgage EQ 761 TY 774 EX 777
April 2022 EQ=811 TU=807 EX=805 - TU VS 3.0 765

CGeorge · ‎06-19-2018

Your credit utilization is way too high. You need to get it, in my humble opinion, at less than 10%. (Odd, but you actually apply for an obtain credit - with the goal of using it once a year at a fast food restaurant!) Don't use it beyond that!

And DO NOT, and I repeat - do not, close any cards.

And, you need a higher total overall credit limit.

This is my humble opinion.

Anonymous · ‎06-20-2018

Thank you all for the tips! I will definitely hold off on applying for anything else until my scores start to climb again.

@NRB525 From the time the balance was highest to now, I'm already saving about $50 in interest a month. Can't wait to put it towards something useful!