@Raysun wrote:Hi everyone
Looking for some advice on how to get my debt paid down so my score goes up. Here's a snapshot of my credit report:
Experian - 661
Capital One (est 2017) - $5107 balance/$5750 limit. 29.24% APR
Capital One (est - 2022) $2125 balance/$3000 limit. 29.99% APR
Credit One (est 2022) - $0 balance/$1000 limit
Kohls (est 2016) - $0 balance/$300 limit
Morgage (est 2022) - 2% paid off (opened 2 years ago)
I don't have anything else on my credit report (no collections, bad debt, etc.). The thing that seems to be really dragging my score down is the high utilization rate, but I can't get the debt down because the interest rates are so high.
What are my best options here? I know I won't get a prime rate on a new credit card to do a balance transfer, so that might not be the best avenue to take. I could try and get a personal loan from my credit union at a lower rate to pay off the $5k card maybe. I could also borrow $5k from my 401k at a 9% interest rate and pay it off, but I'm not sure that's the best course of action either. However I've been employed at my company for almost 20 years and plan to retire there.
Any advice?
Welcome to the forum.
1. If I were you the first thing I would do is pay down the $5107 balance to $4485, or 78%. I believe that will pick you up some FICO points.
2. Then I would pay both down to 68%, then 58%, then 48%.
3. Once at 48% I would start the snowball method, which in your case would mean:
1. Stop using cards.
2. Pay off smallest balance first, on other card paying minimum + something each month.
3. Then pay off other card.
If at some point in this process your FICO 8 score goes up past 700, I would go for either (a) a credit union, non-rewards, no balance transfer fee, platinum card, or (b) a bank card with a 0% balance transfer promo, to soak up any remaining balance.
Penfed approved me for 5k on a gold card when my utilization was almost maxed. 15 month bt offer.
@Raysun I would pay them down to a even 5000 and 2000 and I would go to your local CU and get a personal loan. I would do it for no more than 24 months. That way you have fixed payments and can knock it out as quick as possible or see if they have a no BT transfer fee CC and maybe you can apply for that you can always check penfed's preapproval to see what that yields. I would also review your budget and things just to make sure you dont get in this predicament again, not sure if you had an emergency or something.
