Credit Utilization - Advice Needed ! - myFICO® Forums

Anonymous · ‎11-15-2019

Hello!

So recently, WayFair closed my card without my knowing it with a CL of $12,000 (yikes!) for non-usage since 2016. I should have ran through something, but I was told Comenity rarely closes due to non-use, although going on 4 years would do it. Additonally, I am over the limit on PayPal Credit due to the odd algorithm of Synchorny's new CLI process vs. Comenity's way of doing it, and as many know ,this account is now reporrting (as Over the Limit $5500 / $4800 CL). The remainder of my cards have fairly low balances or none at all, and my USAA card has a balance of $2300/$17,000. The $12,000 hit is going to cost me in points for UTIL, as is the over the limit.

My question is this: How can I maximize my score without suffering new account hits, and which card do I pay down? I have $1000-$1500 I can throw at one of them - if I pay this to bring the Paypal under the limit, will this alone help my scores? Or will I have to pay it down to under 90% to see any bump ? Or, should I focus those funds to my USAA card with only the $2300 balance (14% UTIL on this card vs. 120% on Paypal credit).

Lastly, should I reapply for WayFair card and just hit CLIs on whatever cards I can to make up for the lost credit on WayFair's $12,000 ? I do not want my score to further dip due to inquiries and new accounts, if I can avoid it !

Any and all advice is much appreciated! Thank you MyFico !

Anonymous · ‎11-15-2019

I'm not a pro but if i were you I'd definitley put 1500 towards the paypal that way you're under 90%. Having overall util just for example at say 20% with a card or 2 at 100% and the rest at 0% is worse than having a card or 2 at a lower util and the other cards at a little bit higher %, and that is speaking from experience i did see a nice score bump after bringing my 90%+ util card to under 5%. After paying that i would definitely request a cli on all cards that do sp. Not sure if reapplying for wayfair would help, i personally would be pissed and never wanna deal with them lol.

omgitsMatt · ‎11-16-2019

PayPal Credit - 5500/4800 = 114%

There's two thresholds that'll give you points if you have 1,500 to pay.

The utilization thresholds for an individual credit card are 28.9%, 48.9%, 68.9%, 88.9% and finally over 100% which costs you points. Above 88.9% utilization is considered maxed out. If you are able to bring the utilization down to below 88.9% you will see a boost in your scores since you will cross two utilization thresholds.

If you throw 1k at it, you'll get to around 94%. You wanna get it to less than 88.9% IF you can, but if you can only swing 1k it's still best thrown at the PayPal Credit. A little less even than 88.9%, because of interest charges when your statement cuts.

0.889 × 4800 =‬ 4,267.2

5500 - 4,267.2 = 1,232.8

Try to throw $1,300 at the PayPal, that'll have the most significant impact in the shortest time.

USAA card - 2300/17000 = 13.5%

0.089 × 17000 =‬ 1513

2300 - 1513 = 787

So $787 on the USAA card will take you under the 8.9%, again throw a few more bucks at it so trailing interest doesn't screw you up and take you a few dollars over inadvertantly.

PayPal Credit vs USAA card

If you pay the 1300 on the PayPal Credit, that'd leave you at

2300/17000
4200/4800

You could spend about $900 on PayPal Credit to get under 68.9%

Or $787 on the USAA card to get under 8.9%

That's up to you which to choose, but I'd go on the PayPal credit again if you could.

@Anonymous wrote:
Lastly, should I reapply for WayFair card and just hit CLIs on whatever cards I can to make up for the lost credit on WayFair's $12,000? I do not want my score to further dip due to inquiries and new accounts, if I can avoid it!

I agree with you, don't do that just yet.

If you DO do that, try to do it when the PayPal Credit is under 88.9% and has reported.

If you try for more credit right now, the lenders will see you over limit on one account and not respond well. In the 80% range is still going to get a not so favorable response, but over limit will definitely get you a bad response. Even WayFair, who you have history with.

Moneyklutz · ‎11-16-2019

Just a thought...

I'd toss that 1-1.5k at whatever account has the highest interest rate and worry about my score later.

Our scores have no memory when it comes to utilization but our bank accounts are not that forgiving. Paying interest is the greater enemy

omgitsMatt · ‎11-16-2019

That's the right idea and attitude for sure. For when we're not maxed out and over limit on 1 card.

I think in this situation getting the PayPal account under max utilization is more important. Esp if they can do it in just one payment.

If his lenders see that with an account review or soft pull, it'll snowball the adverse actions and make things a lot worse.

Get below 88.9% on PayPal 1st, then pick the higher interest to tackle from high eventually to low imho

SouthJamaica · ‎11-16-2019

@Anonymous wrote:
Hello!

So recently, WayFair closed my card without my knowing it with a CL of $12,000 (yikes!) for non-usage since 2016. I should have ran through something, but I was told Comenity rarely closes due to non-use, although going on 4 years would do it. Additonally, I am over the limit on PayPal Credit due to the odd algorithm of Synchorny's new CLI process vs. Comenity's way of doing it, and as many know ,this account is now reporrting (as Over the Limit $5500 / $4800 CL). The remainder of my cards have fairly low balances or none at all, and my USAA card has a balance of $2300/$17,000. The $12,000 hit is going to cost me in points for UTIL, as is the over the limit.

My question is this: How can I maximize my score without suffering new account hits, and which card do I pay down? I have $1000-$1500 I can throw at one of them - if I pay this to bring the Paypal under the limit, will this alone help my scores? Or will I have to pay it down to under 90% to see any bump ? Or, should I focus those funds to my USAA card with only the $2300 balance (14% UTIL on this card vs. 120% on Paypal credit).

Lastly, should I reapply for WayFair card and just hit CLIs on whatever cards I can to make up for the lost credit on WayFair's $12,000 ? I do not want my score to further dip due to inquiries and new accounts, if I can avoid it !

Any and all advice is much appreciated! Thank you MyFico !

It seems obvious to me that you've got to concentrate every spare nickel on getting rid of the over limit situation, and then reducing it further so it's not maxed out.

Also, if you haven't already, give Wayfair a call and try to get it reinstated. Probably won't work but can't hurt to try.