11 Credit Cards - Maxed Out - Need Options

[Anonymous]

Weird how things turn out.  I went from bad credit, to fixing my credit, to getting my first real card, to now having maxed out all my cards.  My situation has changed dramatically in the past two years due to an unexpected death in the family and me taking on new financial tasks.  The good news is I am planning to pay off my debt by the end of the year.  However, in the meantime, I need to increase my credit score from 625/6/39/653 to at least 675+

I am currently at 98% (11 credit cards and 8 store cards) utelization on my credit of about $26,000.  All CLI have gone denied.  Chase (3 cards), Cap 1 (3 cards), Barclay (1 card), NFCU (1 card), USAA (1 card), Credit One (1 card) and Merrick (1 card).  Obvious reasons.  I have never missed a payment on any of them and I have no other issues on my credit history.  I am working on selling things to help pay down the debt ratio for now but was posting to see if there is anything else I can do?  I don't want to risk any further inquiries into my credit as I am planning to do a cash out refinance near the end of the year on a house.  That's why I need to up my score.  Otherwise I won't be able to roll in my debts and pay them off.  Money is tight due to the changes and paying anything extra is really not possible.

Any ideas?  This was not the plan.  The plan was to have all these paid off last year without issue.  I'm doing what I can so lay it on me.

[tcbofade]

Step one.  Get them all under 88%.

Step two.  Get them all under 68%

Step three.  Get them all under 49%

Then, start paying off individual accounts.

You've got some work to do, but this is doable!

Good luck!

[HeavenOhio]

Am I correct in assuming that your intention is to pay off most of your debt, but possibly not all of it, by the time you refinance?

One thing I'd keep in the back of my mind is balance chasing. You can try to prevent it by lowering balances across the board, which may or may not work.

This is the general recipe I'd go for:

1. Pay all cards down to 87%, tackling high interest first.
2. Pay all cards down to 67%, tackling high interest first.
3. Pay all cards down to 47%, tackling high interest first.
4. Pay all cards down to 27%, tackling high interest first.
5. Bring balances to zero, starting with the smallest balance first.

88.9%, 68.9%, 48.9%, 28.9%, and 8.9% are known thresholds. Scoring bumps are likely for crossing these, although it's possible that not every threshold will cause a bump. Paying to 87%, 67%, etc. ensures that the next month's interest doesn't bump you back up over a threshold.

Because scoring is one of the components in determining AA (adverse action), attempting to bump your score as you go along would make sense. Bumping as you go along also makes sense because you don't know exactly where you'll be on your plan by the time you re-fi.

[Anonymous]

Typically they ask questions about inquiries if it is before 4 monthes and sometimes up to 6 monthes. Anything after that will not matter. A credit limit increase would be probably help you more then the inquiry it would to take to get it. If the 625 score (currently your lowest score) is experian., then look up which banks pull Experian. They only look at the middle score for mortgages, so you only need two that are 675 or above.

[Anonymous]

Don't waste any HP's on CLI's because you're already sounding all of their risk alarms and won't see any benefit from it. 

You're pretty much in a spot that there's not any quick fix other than finding money and paying the debt. Aside from paying down in the percentages listed above, just do whatever you can to find more money and apply it as soon as reasonably possible. Once your UTI comes down below the thresholds you should start seeing bumps to your scores. Hopefully you can get the debt paid down far enough in time. 

[Brian_Earl_Spilner]

I did what the first two responders said. Score started going up as soon as the cards started updating to the bureaus.

[Anonymous]

Thanks all. It’s pretty much what I figured. Gotta get it paid down. Only way. I’m currently working
On that. Pretty resourceful so we shall see what happens.

Thanks for all the input.

[CreditInspired]

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@Anonymous wrote:

Weird how things turn out.  I went from bad credit, to fixing my credit, to getting my first real card, to now having maxed out all my cards.  My situation has changed dramatically in the past two years due to an unexpected death in the family and me taking on new financial tasks.  The good news is I am planning to pay off my debt by the end of the year.  However, in the meantime, I need to increase my credit score from 625/6/39/653 to at least 675+

I am currently at 98% (11 credit cards and 8 store cards) utelization on my credit of about $26,000.  All CLI have gone denied.  Chase (3 cards), Cap 1 (3 cards), Barclay (1 card), NFCU (1 card), USAA (1 card), Credit One (1 card) and Merrick (1 card).  Obvious reasons.  I have never missed a payment on any of them and I have no other issues on my credit history.  I am working on selling things to help pay down the debt ratio for now but was posting to see if there is anything else I can do?  I don't want to risk any further inquiries into my credit as I am planning to do a cash out refinance near the end of the year on a house.  That's why I need to up my score.  Otherwise I won't be able to roll in my debts and pay them off.  Money is tight due to the changes and paying anything extra is really not possible.

Any ideas?  This was not the plan.  The plan was to have all these paid off last year without issue.  I'm doing what I can so lay it on me.

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Chase is known for quirky behavior when their cards are maxed out and especially if your scores start falling, so, IMO, you should do whatever you can to get those 3 cards paid down quickly so no AA is taken.

NFCU is extremely adaptable about maxed out cards so paying their minimum until you can start paying more is okay for the time being. 

Your credit scores will will only increase when UT decreases. 

Glad to hear you’re resourceful because that’s what it will take. 

[Anonymous]

It's not feasible for me to pay off all my debt by the time I refinance.  The goal is to bump my score so that when I refinance, I can do a cash out and roll my remaining CC debt into the loan and not have that looming over my head anymore.

So as of right now (thanks to my SO), I will be paying off a loan borrowed from my retirement.  Which will free me up to take a loan again.  The plan is to pay off the loan, borrow the max amount I can roughly $3,000 to $3,500 @5.5% interest. This will give me funds to pay towards my debts.  Here is the larger questions.. do I pay off just ONE card with that money or do I pay DOWN 3 cards?  I was planning on paying off one card and using what I was paying monthly ($105) on that card, towards another card.  Basically doubling a payment.  This loan is the start of my snowball.  What's the most optimal for best score impact?

If I don't pay off one card, I can't really increase funds to another card.  Would it look better as a whole having paid off 14% of my debt by virtue of one card or paying down 3 cards?

Make sense?

[DollyLama]

In my opinion what was suggested earlier in thread, across the 3 cards where the creditor is known to take adverse action. You definitely do not want they to balance chase you. This would cause the utilization to be at 100% until they were fully paid off. You also do not want them to close your account with a balance. 

Aggregate utilization is better than individual concerning your situation. So paying down the 3 is better than paying off 1. 

Do check with your HR that you can do a turnaround loan against your 401k in short period of time. Some require a 3-6 month period from pay off till able to borrow again. 

Good luck, and I hope things turn around for you soon.