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General advice on building credit and how to pay off the following CC Debt

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Anonymous
Not applicable

General advice on building credit and how to pay off the following CC Debt

Hello all!

 

Here is a list of all my accounts(PLCC= store card)

Cap One                   $1942/$2000

Citi                             $0/500

Les Schwab              $286/$1000

Credit One                 $216/$650

Cap One Spark          $167/$600

PLCC1                       $0/$500

PLCC2                       $0/$1000

PLCC3                       $0/$2500

PLCC4                       $0/$500

PLCC5                       $0/$500

PLCC6                       $0/$500

 

 

I know the cap one with a 1942 balanace is killing me.  That will be paid down to 30% utilization in a few weeks.

 

For the remaining cards with balances....pay minimum on some and pay one off every month or would it be better to pay $50 on each till total balance is zero?

 

Alot of the PLCC's are new accounts which took my account history way down.  Would cancelling the most recent one or two be advisable?

 

The end game is to purchase a home this time next year.

 

 

Scores are as follows

Exp: 624

TU: 639

Message 1 of 6
5 REPLIES 5
SouthJamaica
Mega Contributor

Re: General advice on building credit and how to pay off the following CC Debt


@Anonymous wrote:

Hello all!

 

Here is a list of all my accounts(PLCC= store card)

Cap One                   $1942/$2000

Citi                             $0/500

Les Schwab              $286/$1000

Credit One                 $216/$650

Cap One Spark          $167/$600

PLCC1                       $0/$500

PLCC2                       $0/$1000

PLCC3                       $0/$2500

PLCC4                       $0/$500

PLCC5                       $0/$500

PLCC6                       $0/$500

 

 

I know the cap one with a 1942 balanace is killing me.  That will be paid down to 30% utilization in a few weeks.

 

For the remaining cards with balances....pay minimum on some and pay one off every month or would it be better to pay $50 on each till total balance is zero?

 

Alot of the PLCC's are new accounts which took my account history way down.  Would cancelling the most recent one or two be advisable?

 

The end game is to purchase a home this time next year.

 

 

Scores are as follows

Exp: 624

TU: 639


1. Pay Capital One down to 29% or less.

2. Have all but one of the cards report a zero balance, and the one card that does report a balance of 29% or less.

3. Do not carry a balance and do not make any minimum payments; just pay in full on everything.

4. Cancelling the store cards won't help your score at this point. But getting rid of them is ok so long as it doesn't raise your utilization above 3%.

5. No new credit applications until after you close on your home.

6. If you have any negatives, try to get rid of them by sending verification letters to the bureaus.

 


Total revolving limits 586020 (520820 reporting) FICO 8: EQ 706 TU 701 EX 692




Message 2 of 6
Anonymous
Not applicable

Re: General advice on building credit and how to pay off the following CC Debt

Great advice from SouthJ as usual.

 

I'd add to it the recommendation to be really careful about cancelling those store cards while you are preparing for a mortgage.  The mortgage models (according to forum contributor Thomas Thumb) really like it when you are able to show several cards with all of them at $0 except one.  That's a lot easier to do when you have several cards!  Closing a couple might make sense if they are cards you have no use for at all, but until you own the new home I'd be a lot careful about closing all of them.

Message 3 of 6
Anonymous
Not applicable

Re: General advice on building credit and how to pay off the following CC Debt

So would you pay the cap one with 1900 down to 30%.......pay off the lowest ones to zero....then pay off the cap one to zero and only use that one?

 

 

Would you pay them all down the same month or spread them out over 3 or 4 months.

 

 

For instance. 

July pay 1900 down to 600

August pay Card 2 off

Sept pay card 3 off

October pay the 600 off from the 1900 card?

Message 4 of 6
Anonymous
Not applicable

Re: General advice on building credit and how to pay off the following CC Debt

Keep up with paying on time, letting them age, etc. Your score is not an issue unless you are trying to apply for new credit. Sit tight and garden until then and a few months or so before mortgage time tighten up on utilization, etc to maximize scores.

 

If anything you need aging time and no new credit to bump your scores. And if you have any baddies you can have removed/cleared.

 

Pay off what you can, certainly if its collecting interest.

Message 5 of 6
Anonymous
Not applicable

Re: General advice on building credit and how to pay off the following CC Debt

Just for clarity, the threshold SouthJ recomended is not a paydown to 30%.  It's a paydown to less than 29%.  So multiply the CL by 0.29, then subtract a dollar.  This all has to do with the way FICO rounds all percentages up.  Be sure also to take into account any interest or fees that you might get charged.  You want all cards to be reporting < 28.99% even after interest is charged.

 

As I am sure SJ will explain (in answer to your other question) there's no advantage to spreading the payments out.

Message 6 of 6
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