Credit rearrangement advice needed, how would you proceed?

[kabal57]

so I want to rearrange my credit situation, here's where I stand:

I have about 40k in cc's

23k -citi

7k-usaa

5k -B of A

4k Cap1

cs is 655 (fico) no lates, most accts between 5-8 years old, 3 paid off car loans, etc.

one stinkin collection from verizon wireless that they sent to collections when i ported from them, which is BS, but that dropped me from a 720 to 580 when it hit, score has slowly crept back up into the mid sixes..

I have a mortgage (va) through suntrust, (now a rental property) and have a 2nd va mortgage pending (new house I'll be living in)

my income is about 70k/yr before taxes.. I'd like to rearrange my credit and am unsure how best to proceed and was hoping for some advice here.

I will be closing on the 2nd mortgage in about a month, and need to buy another car, but also want to dump B of A and cap1..

I am a Navy Fed member and will probably be applying for a loan with them for the car soon, should I do it before or after closing on the 2nd house?

I know I can get navy fed cc's to balance transfer cap1 and BA, should I do that before or after closing? before or after buying the 2nd car?

I would think I should do this all at once to minimize the inquiries impact, but in what order should I do things?

how should I proceed to minimize the impact on my credit score while adding new cc's and a new auto loan?

[HoldingOntoHope]

Welcome to the forums. First and most importantly DON'T OPEN OR CLOSE ANY ACCOUNTS WHILE THE MORTGAGE IS PENDING!!!!

OK, now if you are eligible for NFCU I would jump on them as soon as possible after the mortgage is finalized. You can apply for both a credit card and auto loan at the same time with them. As long as your history is clear other than the Verizon collection you should be fine with them. Of course they will take into account your debt to income so the two mortgages will have an effect on how much they are willing to lend. But their credit standards are forgiving and once you establish history with them they are very generous in credit line increases.

If you absolutely want to close the other two accounts then do so after establishing the NFCU accounts. But in general our advice is to leave the accounts open unless they charge some sort of annual fee. You can put a small recurring monthly charge on them (such as cell or utilities) and schedule them to pay in full every month so you don't pay interest. Or just pull them out for an occasional purchase and pay them as soon as the charge hits.

As to the Verizon collection you may want to visit the Rebuilding Your Credit forum and look at threads which discuss goodwill (GW) adjustments. Basically you send a letter that says I messed up, can you forgive me? It doesn't always work, but it's a tool in the box.

[RobertEG]

+1 on leaving the two CCs open, unless they have an annual fee you wish to avoid.

Some reasons include.....

They comprise approx 23% of your total credit limit, and once closed and paid off, that credit limit will be lost in calculation of your overall % util.

Since FICO also scores % util on individ cards as well as the percent of cards reporting a balance, if you keep them at very low utils,it will improve your scoring of individ acct util, and if reporting $0 in a given month, will result in two in the denominator of cards reporting a balance.

While closing them wont affect your current avg age of accounts, closing date triggers the running of the approx 10 year clock at which time the CRAs can delete the accounts, thus affecting your AAoA in the distant future.

[kabal57]

thanks for the replies guys, they're appreciated. The BA and CAP cards do not have an annual fee, they just have highish rates and I got them when I first rebuilt my credit years ago.. and I don't like BA as a company.. but I hadnt thought about them affecting my overall util after transferring the balances on them, so I will keep them open, but just use them rarely.

The verizon co is really an annoyance to me, I was a cust with them for 4 years, ported to a new company and they sent the bill to collections before I even recieved my final bill!!  WF home mortgage has been understanding about why I refuse to pay it, as it's the only leverage I have against them to get it removed, and they're not requiring it to be paid to close (which is great!)

I was thinking of using NFCU for the car purchase, (prob about 20k, cheap gas saver car) but have also been considering a lease with mazda for a mazda 3.. not sure how I wanna tackle that one, does anyone know what kind of fico NFCU looks for to get an auto loan?

[HoldingOntoHope]

NFCU will work with lower FICO's they just adjust the interest rates to reflect the risk. I believe anything that starts with a 6 would be able to clear a loan with them in most cases. Of course they are still interested in income and ability to repay depending on other debts. There is also some evidence that having a primary banking relationship with them as in direct deposit will influence the loan outcomes. But since you are qualified for a mortgage then you will have no problem assuming that your income can handle the obligation.