Debt Ratio - Pay Down

[Anonymous]

If you had $10K to pay down debts, which one(s) would you tackle first? All is current - no lates.

Interest rates on all CC's are 20% or higher. highest is 30%.

Revolving       Balance        Limit     Utilization       Status
Home Depot      991          1500         66.07%        open
Union Plus       5796          6000        96.60%        open
Amex Blue     10571         10700       98.79%        closed
Lowes                 78            240        32.50%        open
CapOne             264            500        52.80%        open
Beneficial       10407         10500        99.11%        open
    
Revolve Total   28107         29440    95.47% 
    
Loans    
Toyota             13004       25134     51.74%         open
Sallie Mae         2042         3296     61.95%         open
    
Install Total      15046       28430     52.92% 
    
Cumulative       43153       57870     74.57% 

Any help would be greatly appreciated.

[Anonymous]

I don't know what your financial situation is. Assuming that you are willing to put together an aggressive plan to pay it all down, I would take the 10k and do the following:

Payoff:

Home Depot 991

Union Plus 5796

Lowes 78

CapOne 264

Total 7129

Pay down:

Amex Blue 1435

Beneficial 1435

This will bring your total revolving debt utilization down to 59.6 % which will help your score more than any other scenario.

You may see a moderate increase in score as a result of lowering your utilization. You can expect to see significant increases in your score once utilization is below 30% providing there is no new negative activity.

From what I've read the goal is to keep your revolving balances between 1 and 9%.

Just continue to pay your installment accounts as per schedule, as paying off revolving debt is the second highest contributing factor to your credit rating.

Best Wishes.

Disclaimer:

This is my opinion. If you do the above and it does not work for you, just remember, I didn't create the algorithm. If I had, we'd all have better credit.

Message Edited by creditgotmedown on 04-15-2009 06:37 PM

[Anonymous]

One more note:

If you pour 10k into your revolving debt, it will decrease your utilization the same no matter which account you pay off first.

With that said, it has been my experience that having any one card over 30% utilization causes a decrease to your FICO Score regardless of whether your utilization is below 30% or not. The above recommendation puts more of you accounts at less than 30% thus having a greater impact on your score.

[Anonymous]

Is the Amex Blue that is now closed reporting the CL or a CL of $0?

[Anonymous]

I didn't see that sidewinder.

What is the typical behavior of a revolving account that is closed with a balance?

[Anonymous]

The Amex Blue CL is being reported. Total FICO utils are at 98% matching % i have listed.

Otherwise i would think it would be well over 100%.

[Anonymous]

Different creditors report closed accoutns differently.

I was curious as to whether it was showing a CL or $0 to know how it was affecting your util.

If your util on your report shows what you have, then all is cool.

If your goal is to get max FICO points from using that $10k, then I agree with the above poster. Pay as many accounts(revolving) as you can completely off and use the remainder on your other accounts.