Help Needed - How should I pay off debt for credit score increase?

[Kforce]

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@Anonymous wrote:

Overall - $8,779.89 - $17,550.00 - 50.03%

I have about $1500 to throw at the cards today and then anywhere from $500-1200 a month going forward.

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[  8,800 - (1500 + (800 * 9)) =  100  ]

In 9  months you are clear and free.

Your goal should be best score when you need it, not next month.

Pay how ever you want, just keep paying what you said you could.

I would pay high interest down (save money), and not worry about scores for the next few months (who cares).

Hold off on refinance and car until your scores and debt are ideal. (Rates trump waiting a couple extra months)

[Anonymous]

If I were you, I would have contacted Cap1 about removing that 30 day. Often times they will forgive your first infraction,  by explainig what happend. Especially if you PIF. We're only Human, afterall.

It never hurts to ask, the worst they can say is no.

[SouthJamaica]

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@Anonymous wrote:

Hi All,

I'm looking to pay off some of my credit card debt in hopes of boosting my FICO scores asap. My wife and I are hoping to refinance our mortgage and purchase a car in the next 6-18 months. I've got a bit of cash to throw at some of my debt and I'm wondering which is the most effective way to pay the cards down in regard to boosting my score? Here are my cards and balances:

Card - Balance - Limit - Util.

Discover - $684.71 - $2,900.00 - 23.61%

Chase - $0.00 - $1,500.00 - 0.00%

Wells Fargo - $4,880.00 - $5,500.00 - 88.73%

Capital 1 #1 - $2,444.87 - $3,500.00 - 69.85%

Capital 1 #2 - $770.31 - $1,150.00 - 66.98%

Citi - $0.00 - $3,000.00 - 0.00%

Overall - $8,779.89 - $17,550.00 - 50.03%

I have about $1500 to throw at the cards today and then anywhere from $500-1200 a month going forward. If I'm trying to get the biggest score jump possible with this first payment ($1500) which cards should I pay down first and down to how much? Then, what should be my approach going forward?

Thanks for you advice!

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1. Pay off Capital One #2, and Discover with that initial 1500, because that's the easiest way for you to quickly add 2 zero balances. The FICO mortgage scores like zero balances.

2. Then bring your other 2 cards down to 59%, then 49%, and so on.

3. When you've got both at 29% or less, start zeroing them out.

[SouthJamaica]

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@Anonymous wrote:

Thanks for the quick and helpful responses so far!

Would there be a scoring difference if I paid off the two smaller balances (Discover and Cap1 #2) vs putting all $1500 toward the WellsFargo? Of those two options, which would impact my score most (if at all)?

Thanks again!

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Yes, that is the best thing you can do, because the mortgage scores react strongly to the number of accounts with balances... they love zero balances.

[SouthJamaica]

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@Anonymous wrote:

Hi All,

I'm looking to pay off some of my credit card debt in hopes of boosting my FICO scores asap. My wife and I are hoping to refinance our mortgage and purchase a car in the next 6-18 months. I've got a bit of cash to throw at some of my debt and I'm wondering which is the most effective way to pay the cards down in regard to boosting my score? Here are my cards and balances:

Card - Balance - Limit - Util.

Discover - $684.71 - $2,900.00 - 23.61%

Chase - $0.00 - $1,500.00 - 0.00%

Wells Fargo - $4,880.00 - $5,500.00 - 88.73%

Capital 1 #1 - $2,444.87 - $3,500.00 - 69.85%

Capital 1 #2 - $770.31 - $1,150.00 - 66.98%

Citi - $0.00 - $3,000.00 - 0.00%

Overall - $8,779.89 - $17,550.00 - 50.03%

I have about $1500 to throw at the cards today and then anywhere from $500-1200 a month going forward. If I'm trying to get the biggest score jump possible with this first payment ($1500) which cards should I pay down first and down to how much? Then, what should be my approach going forward?

Thanks for you advice!

---

I disagree with most of the advice you are being given here. It is all great advice for FICO 8 scores, but your biggest concern is your mortgage scores, which are not as reactive to percentage changes in dollars utilization as they are to changes in the number of accounts with balances. Quickly picking up 2 zero balances with the $1500 -- dropping the percentage of cards with balances from 66 2/3% to 33 1/3% will give your mortgage scores a nice boost!

[CreditInspired]

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@Anonymous wrote:

Hi All,

I'm looking to pay off some of my credit card debt in hopes of boosting my FICO scores asap. My wife and I are hoping to refinance our mortgage and purchase a car in the next 6-18 months. I've got a bit of cash to throw at some of my debt and I'm wondering which is the most effective way to pay the cards down in regard to boosting my score? Here are my cards and balances:

Card - Balance - Limit - Util.

Discover - $684.71 - $2,900.00 - 23.61%

Chase - $0.00 - $1,500.00 - 0.00%

Wells Fargo - $4,880.00 - $5,500.00 - 88.73%

Capital 1 #1 - $2,444.87 - $3,500.00 - 69.85%

Capital 1 #2 - $770.31 - $1,150.00 - 66.98%

Citi - $0.00 - $3,000.00 - 0.00%

Overall - $8,779.89 - $17,550.00 - 50.03%

I have about $1500 to throw at the cards today and then anywhere from $500-1200 a month going forward. If I'm trying to get the biggest score jump possible with this first payment ($1500) which cards should I pay down first and down to how much? Then, what should be my approach going forward?

Thanks for you advice!

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Since more than half of your cards have balances (4 out of 6), I would pay off Cap 1 #2.  The more cards you have with a $0 balance, the better.

Then the remaining $750, I would put towards Wells Fargo.  

Then every month, I would work to get the other cards below 48.9% UT, then 28.9%, and finally 8.9%.

Good luck to you.

[Remedios]

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@SouthJamaica wrote:

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@Anonymous wrote:

Hi All,

I'm looking to pay off some of my credit card debt in hopes of boosting my FICO scores asap. My wife and I are hoping to refinance our mortgage and purchase a car in the next 6-18 months. I've got a bit of cash to throw at some of my debt and I'm wondering which is the most effective way to pay the cards down in regard to boosting my score? Here are my cards and balances:

Card - Balance - Limit - Util.

Discover - $684.71 - $2,900.00 - 23.61%

Chase - $0.00 - $1,500.00 - 0.00%

Wells Fargo - $4,880.00 - $5,500.00 - 88.73%

Capital 1 #1 - $2,444.87 - $3,500.00 - 69.85%

Capital 1 #2 - $770.31 - $1,150.00 - 66.98%

Citi - $0.00 - $3,000.00 - 0.00%

Overall - $8,779.89 - $17,550.00 - 50.03%

I have about $1500 to throw at the cards today and then anywhere from $500-1200 a month going forward. If I'm trying to get the biggest score jump possible with this first payment ($1500) which cards should I pay down first and down to how much? Then, what should be my approach going forward?

Thanks for you advice!

---

I disagree with most of the advice you are being given here. It is all great advice for FICO 8 scores, but your biggest concern is your mortgage scores, which are not as reactive to percentage changes in dollars utilization as they are to changes in the number of accounts with balances. Quickly picking up 2 zero balances with the $1500 -- dropping the percentage of cards with balances from 66 2/3% to 33 1/3% will give your mortgage scores a nice boost!

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It's auto loan also, so both mortgage and FICO 8 scores are both in play. 

[Anonymous]

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@Anonymous wrote:

The only negative I have is a 30 day late from March 2017.

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While it goes off topic of this thread, if you only have 1 negative item on your CR, removing it would have a very big impact on your FICO scores.  The gain you'd receive from getting that negative removed would be greater than the gain received from your utilization improvements, perhaps even if you were to pay all of that debt down.  I'd suggest hitting the rebuilding forum and checkout out goodwill letters.  A lone 30 day late payment is the easiest negative mark to get removed via GW, so if I were you I'd get on top of that immediately.  Aside from the cost of some stamps and some time, the score gain comes at little actual cost... far less than the thousands needed to pay down/off utilization.

[Anonymous]

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@SouthJamaica wrote:

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I disagree with most of the advice you are being given here. It is all great advice for FICO 8 scores, but your biggest concern is your mortgage scores, which are not as reactive to percentage changes in dollars utilization as they are to changes in the number of accounts with balances. Quickly picking up 2 zero balances with the $1500 -- dropping the percentage of cards with balances from 66 2/3% to 33 1/3% will give your mortgage scores a nice boost!

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Not necessarily, SJ.  I proved the opposite about a month ago if you recall when going from AZEO to all of my cards with balances and 2 out of 3 of my FICO 8 scores moved more than 2 out of 3 of my mortgage scores.  Only my EX 5 score was impacted significantly.  After some discussion with TT, it was determined that my lack of an inquiry in the last 12 months was likely the reason.  My question then to the OP becomes whether or not he has an inquiry in the last 12 months... because if he doesn't, it's possible that his EX/TU mortgage scores aren't likely to be impacted much by number of accounts with balances.

[Anonymous]

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@Remedios wrote:

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So, we're basically in agreement, minus how many points part? 

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I didn't see you quantify how many points (I may have missed it) you believe the OP would gain in crossing 48.9% aggregate and taking his highest individual utilization card from > 68.9% to < 68.9%, but my feeling was that you didn't think it would be many at all.  I'm quite certain the impact would be 15-20 points on most profiles, which to me is a pretty significant shift for the paydown proposed by the OP.