Advice on how to allocate payments

[Platinum25]

A brief snapshot of my situation...Credit score currently 696, need to raise to 715 by the end of April / beginning of May. 

-  $10K in the bank to make payments

-  Amex $6100 ($7400cl - lowered this month from $17K for some reason)

-  Chase $6000 ($7500cl)

-  Flooring card $6800 ($7000cl)

How should I allocate payment to bring my DTI down on these cards and raise my score in the next 2 months?  My score is only low because the flooring card is new and i'm close to my limits on a couple of cards, 7+ years since any baddies.

Any help is appreciated.

Thanks!

[Anonymous]

Hi Timmay. Phew! Of the cards you listed you owe $18,900 on cl's of $21,900. That's 86.3% utilization. 85% is considered maxed out, and is bad as a collection. Your scores are being hurt terribly. Your scores are low due to utilization ratio.

Putting 10k toward that cc debt will lower your utilization to 40.6%, which is much better. Still to high, but much better. You should be striving for 10%-20% utilization for best scores, with 1%-9% for maximum beneficial impact.

With 10k to spread around, I'd say allocate 33% of funds to each.

I'm sure others will chime in today to offer their opinions.

[MidnightVoice]

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ChiTownTimmay wrote:

A brief snapshot of my situation...Credit score currently 696, need to raise to 715 by the end of April / beginning of May. 

-  $10K in the bank to make payments

-  Amex $6100 ($7400cl - lowered this month from $17K for some reason)

-  Chase $6000 ($7500cl)

-  Flooring card $6800 ($7000cl)

How should I allocate payment to bring my DTI down on these cards and raise my score in the next 2 months?  My score is only low because the flooring card is new and i'm close to my limits on a couple of cards, 7+ years since any baddies.

Any help is appreciated.

Thanks!

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It in part depends what the APRs are, but Amex looks like it is getting ready to cut you to the bone.  Be ready for another CL decrese if you pay down Amex

[Platinum25]

APR's are as follows:

Amex:  10.24%

Chase:  8.9%

Flooring Card:  0%

Why would Amex cut me down even more?  I've been a cardholder since 2005 and have excellent payment history.  They told me that they cut me down because of mortgage information they received from my credit bureau, which doesn't make much sense to me.  I haven't refi'd in over a year...my mortgage was just bought by a different mortgager but I can't see how that would have an adverse effect on my CL with them.

So, by paying down to at least 50% total util do you think I can achieve a 715 or would I have to pay more?

Thanks for the replies!

[MidnightVoice]

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ChiTownTimmay wrote:

APR's are as follows:

Amex:  10.24%

Chase:  8.9%

Flooring Card:  0%

Why would Amex cut me down even more?  I've been a cardholder since 2005 and have excellent payment history.  They told me that they cut me down because of mortgage information they received from my credit bureau, which doesn't make much sense to me.  I haven't refi'd in over a year...my mortgage was just bought by a different mortgager but I can't see how that would have an adverse effect on my CL with them.

So, by paying down to at least 50% total util do you think I can achieve a 715 or would I have to pay more?

Thanks for the replies!

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Amex is getting sticky.

Well, although the flooring card is free of interest, it is well maxed out.

My personal idea would be to get the Chase and Amex below 49% and throw the rest at the floor

[dangphuocloc72]

pay AMEX first , then Chase . aMEX will raise your CL back . working on flooring card later . but 1 thing you should know AMEX report 2 month later for 0 Balance . your score  uup again in 2 month .

[Platinum25]

I don't have to throw any money toward the flooring card right now.  It's 0% for a year and I just got it.  The only reason I was thinking about sending money toward it is because I feel it is adversely effecting my DTI.  If you feel I would be better off sending the majority of the money to AMEX and Chase I can do that too.  Maybe just send $1000 to the flooring card so I'm not only $200 within my CL?!?!  It's so close because they only ran the credit app for the amount I needed to make the purchase.  I probably should have requested a higher CL to avoid this issue, but hindsight is 20/20.

[MidnightVoice]

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ChiTownTimmay wrote:

I don't have to throw any money toward the flooring card right now.  It's 0% for a year and I just got it.  The only reason I was thinking about sending money toward it is because I feel it is adversely effecting my DTI.  If you feel I would be better off sending the majority of the money to AMEX and Chase I can do that too.  Maybe just send $1000 to the flooring card so I'm not only $200 within my CL?!?!  It's so close because they only ran the credit app for the amount I needed to make the purchase.  I probably should have requested a higher CL to avoid this issue, but hindsight is 20/20.

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If it is doable I would get the flooring below 80% and the rest below 50%.

A maxed out card, even at 0%, does not look good, and 85% util is usually coonsidered close to maxed out.  The CR does not show the APR.

And these suggestions are based on your need to increase your score.  Obviously, if you don't need to increse your score, then the flooring card get no money for a long time.  But if you need a 715 plus, then you have to deal with it

Message Edited by MidnightVoice on 02-26-2008 12:09 PM

[dangphuocloc72]

One thing I knew Amex alway watching your CR  , if some thing changed in your CR they know right the way , that why they cut back your CL down . about your score if you want 715 you must paid all your balance down 30% your score will go up very nice .

If you don't needs refi your  house or some thing big . so don't worry about score . just paid any of them you like .

[Anonymous]

If you look at the utilization on the cards that you presented it has already been pointed out that two of the three are virtually maxed out and the third one is nearly there as well.

Though you are probably not in trouble – it may appear to Amx that you are in trouble or getting ready to get into trouble - and they do not want to be next.

Also, you want to look at the number of revolving accounts you have – if you only have three as you show – and all three have balances – that is a ding on your score. The greatest ding though is the cards looking like that they are about to be maxed out.

If I am looking for the highest score as soon as possible – then I would pay $3,750 on Chase – that would bring this card utilization down to 30% not 9-10% - but at least you are getting there.

Then I would pay $4,700 on the flooring card – that would bring this card down to 30% as well.

I would take the balance of $1,550 and pay the Amx card. This will not bring the card down to 30%, but it will at least let AMX see what you are doing and that you are not maxed out. This may enable you to ask Amx to reconsider their CL decrease. If they reconsider (a big if) then you have a real shot at achieving 715 – If the other two actions do not move you to that number.

Afterwards, and dollars permitting, I would pay in full one of those cards – probably the flooring and keep it that way. Additionally, I would seek to open another account – that way you will have 4 accounts with half of them with balances – instead of having three accounts with all three having balances – again another ding.

What ever you decide, before taking action you can do a dry run by putting the information in the FICO simulator to see what effect your action will have on your score.