Hi Patrocle - welcome to the forums!
Keep it open till you pay it off. D0n't use it anymore, just keep making payments -- at least the min due + interest each month if you can swing it. You don't want to close it with a balance still due -- that can cause other issues - once you close, the credit limit will be $0 and your balance will be considered over the limit.. which can freak out your other creditors and kill your FICO scores; besides, you'll also still be charged interest even with the card closed. The only time it's beneficial to close the card with a balance is if they are steadily increasing the interest rate on you -- then, closing might make sense as it would freeze the current interest rate which will help with the payoff, but it will still result in the over-the-limit problem. Just keep paying as much as you can on the account and throw anything extra you can at the balance each month -- even if it's only $10 extra. So long as you're making the min + interest (more if possible) each month, and not making any new purchases, you'll be OK.
Also -- I've heard, from others, something about CreditOne charging a fee for credit limit increases -- is this what they are offering you? If so, then yes, you are absolutely right to decline. However, if there is no fee for the increase then you may want to go ahead and take it -- not to use it, but to help lower your utilization as you pay down the debt.
When your balance hits $0, consider closing CreditOne -- the high interest and fees puts this card in predatory territory. Instead, try applying for a secured card from Discover or Cap One if you are unable to qualify for an unsecured card. Best of luck to you!
For now, keep any cards that are, aside from regular monthly interest, free to use (i.e. no annual / additional monthly maintenance fees). You need the credit limits as a cushion since you're at 70% util.
You can consider cancelling any cards that do have annual / monthly fees to help save money. Keep in mind, so long as your util is high, losing the credit limits from closing cards could cause your scores to drop a bit becuase your utilization ratio (total balance / total credit limits) will increase.
So long as you are confident in your ability to continue making at least the minimum payments until the balance is paid off, then yes, absolutely cancel that CreditOne protection.
As for the Amex Blue -- I would keep that open. You don't have to use it regularly right now as the monthly payments and balance posting for your CreditOne account count as usage as far as FICO is concerned, so paying that balance monthly is enough to help your scores improve. I would just suggest making a small charge on the Amex every 3-6 months, just to keep it active. When you get your scores up a bit (like in the mid 600's) you can see if you can qualify for a product change to another amex card that better suits your spend.
Once you get your utilization under control (below 8.9% overall) then you can start cancelling more cards if you don't feel they are useful. At that point, the loss of their credit limits won't have such a negative impact on your FICOs.
One more thing --
Keep these utilization thresholds in mind (red is too high):
8.9%, 28.9%, 48.9%, 68.9%, 88.9%
As you paydown your balances, and your overall util decrease to below each threshold, you'll start to see score improvements. So, right now you say you're at about 70% util -- once you paydown below 68.9%, you should see a couple of points; below 48.9%, you'll see few more, and so on; below 28.9% is a generally a good range to be in; below 8.9% is ideal.
Same rules apply to individual card utilization.
For optimum scoring: (1) Try to keep each individual card balance below 28.9% of its respective credit limit; and (2) Try to keep overall utilization (all balances/ total limits) below 8.9%.
But for now -- just concentrate on paying things off... you can worry about having perfect uiltization later.
Yep -- keep them open while you pay down your debt. Once your debt is paid -- feel free to close them. You just want the limits to help you right now. The higher available credit you have in relation to balances due, the better for your FICO scores.
You can calculate all of this --
Add up all of your credit limits
Add up all of your balances due
Divide: Total Balances Due / Total Credit Limit.
Multiply: The above result by 100.
That will give you your total credit utilization.
Refer to the util thresholds in my previous post. You want your overall util to be below 8.9% for optimum scoring -- but below 28.9% is OK too.
For example:
Pretend you have 3 credit cards and the total balance due for all 3 is $1500. And when you add the credit lines for all 3 cards you get $3500.
Total Balance $1500 / Total credit limit $3500 = .4285 * 100 = 42.85% This means your overall util is high.
Say you close one of those 3 cards -- and the one you closed had a $500 limit. So now, your total credit limit has decreased from $3500 to $3000, but your total balance of $1500 remains the same.
Total Balance $1500 / Total credit limit $3000 = .50 * 100 = 50% This overall util is really high now -- in fact, you've now crossed the 48.9% threshold which means your FICO scores will take a hit (maybe about 10-15 points lost) just because you closed one card and lost its credit limit.
The good thing is that utilzation has no memory, so once you pay your balances back down, you regain any points lost.
Right now, your scores are suffering because of your utilzation. As you lower that percentage, you will see increases. It will take some time because you have to pay a bit at a time -- but you will see improvement.
Yea, Credit Karma scores are not FICO - they are of the Vantage 3 model and do not respond to changes and other aspects of your credit report the same way. Also - lenders don't use them to make credit decisions. Credit Karma is, however, great for monitoring your EQ and TU credit reports.
MyFICO is very good - a bit pricy though because it provides you with ALL of your FICO model scores, not just FICO 8 - I believe a total of 27 or 28 scores.
You can also check out Experian's CreditWorks Premium service. For $24 / month you get daily updated EX reports and FICO 8 score and monthly updated TU & EQ FICO 8 scores. They also have a trial membership avail that you can test out before purchasing a monthly membership - good mobile app too. Personally, I like the CreditWorks for rebuilders because of the EX daily score & report updates - it's nice to see your changes as they happen when you're rebuilding (because you'll be impatient) as opposed to waiting a month to see your progress.
