Low CLI Purgatory

[Anonymous]

Brutal Body Shots -  First let me say sorry for the delayed response. I didn't realize that I would have so many replies so quickly. Moreover, let me tell you thank you for taking the time to help, advise and enlighten me with credit techniques to help improve my situation. Can't tell you enough how appreciative I am. I kinda copy and pasted my reply to you and CGID because you guys had similar questions and were amongst the first to reply, however, I am sincerely thankful for your insight assistance. 

Also, forgive me for the error in my title /topic heading. I meant to write credit score purgatory. I guess due to my recent cli denial I had that on my mind. Hope this clears that up for evryone. In terms of your questions about my credit specifics....here is where I currently stand :

Fingerhut Advantage - $1200 Open 1yr

Target RedCard - $1900 Open 1yr

WalMart CC - $150 Open 2 yrs.

Merrick Bank Mc - $600 2yrs.

Cap 1 QS - $750 11mths

Utilization Rate -  FH 5%, Target 65%, WM 10%, Merrick 80%, Cap1 40%

Late Payments - 1 late payment ( 30 day ) 2 years ago - WalMart. Perfect with all other accounts.

[Anonymous]

Almost forgot, I sent you an earlier reply but I didn't ask this....with the Share Secure Loan Technique, you say that it can possibly raise my credit score 20-30 points, how long does it take for that minimum score boost go into effect? I don't need an immediate boost, but the points would help in the long-run as I plan to purchase a car sometime next year.

[Anonymous]

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@Anonymous wrote:

Hey Credit Guy ! First let me say sorry for the delayed response. I didn't realize that I would have so many replies so quickly. Moreover, let me tell you thank you for taking the time to help, advise and enlighten me with credit techniques to help improve my situation. Can't tell you enough how appreciative I am.

Also, forgive me for the error in my title /topic heading. I meant to write credit score purgatory. I guess due to my recent cli denial I had that on my mind. Hope this clears that up for evryone. In terms of your questions about my credit specifics....here is where I currently stand :

Fingerhut Advantage - $1200 Open 1yr

Target RedCard - $1900 Open 1yr

WalMart CC - $150 Open 2 yrs.

Merrick Bank Mc - $600 2yrs.

Cap 1 QS - $750 11mths

Utilization Rate -  FH 5%, Target 65%, WM 10%, Merrick 80%, Cap1 40%

Late Payments - 1 late payment ( 30 day ) 2 years ago - WalMart. Perfect with all other accounts.

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@Anonymous you clarify whether the only derog on your report is the single 2-year--old 30-day late for the WalMart card?  I ask because in your initial post, you wrote:

"I have a couple of baddies from the past that still haunt, but are about to fall off in the next few months to a year, so I'm just gonna allow them to disappear and not touch them."

That why in my first response I said it sounded like you had some derogs that were six years old in addition to the 2-year late.

The high individual utilizations on a few of your credit cards is hurting your score.  As you are hearing from many of us, your top priority should be paying all cards to zero except one (AZEO) with the remaining card reporting a small balance.  After all those balances are reporting their new much lower numbers, you can circle back with us.

The other task is to get clearer what your derogs are and see if you can get them removed.  I like your idea of letting the old derogs fall off (though I am still unclear whether they exist) but you can also start work on getting the Day 30 removed.  That in itself could take a year or so to accomplish.

[Anonymous]

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@Anonymous wrote:

Almost forgot, I sent you an earlier reply but I didn't ask this....with the Share Secure Loan Technique, you say that it can possibly raise my credit score 20-30 points, how long does it take for that minimum score boost go into effect? I don't need an immediate boost, but the points would help in the long-run as I plan to purchase a car sometime next year.

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@Anonymous SSL technique only helps people who have no open loans.  In your initial post you wrote:

"Student loans are in good standing but in deferment."

Thus it sounds like you have open loans and the SSLT won't help.

I missed what you said about your student loans initially because you said you only had five accounts (the five cards).  And in your recent recap you again do not mention the loans, but I am guessing they are still there.

[Anonymous]

Thanks for getting back with me. I'm sorry, in terms of my credit cards, the WM is the only derog from 2 years ago. The other derogs come from 2 medical bills and an old direct tv account. The  medical bills fall off summer 2018 and the Direct TV Nov 2018.

As far as the AZEO, I was under the impression that as long as I keep my utilization rate around 20% ( which I haven't done ) that I would be fine. SO I shouldn't carry a balance on any of my cards except for 1 ? With zero balance will some of my creditors possibly close my account due to inactivity?

I know you don't know exactly, but what type of impact can I reasonably expect once I pay up all of my cards?

[Anonymous]

If you have baddies on other accounts outside of your revolvers, they are still adversely impacting your profile and scores. The removal of any (but not all) is unlikely to raise your score much, since others will still be present. As for utilization, while "around 20%" (reported) isn't terrible, it's important to realize that since you're above 9% that you'd be leaving points on the table.

It's also important not to confuse reported balances with carrying balances. As long as you are paying your statement balance in full, you aren't paying interest nor are you considered to be carrying a balance. It's possible to still report a balance though if you are paying just your statement balance but your current balance exceeds that.

Don't worry about creditors shutting you down due to reporting a $0 balance. They are looking for usage every 6 months or so, but usage has nothing to do with a reported balance. You can pay in full every month and report a $0 balance on a card and still be using he card heavily. In this case your chances of having the card closed would be next to zero as you are using it frequently, certainly more than once every 6 months.

[Anonymous]

A lot of good questions, pal.  My answers are in blue below.

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@Anonymous wrote:

Thanks for getting back with me. I'm sorry, in terms of my credit cards, the WM is the only derog from 2 years ago. The other derogs come from 2 medical bills and an old direct tv account. The  medical bills fall off summer 2018 and the Direct TV Nov 2018.

As far as the AZEO, I was under the impression that as long as I keep my utilization rate around 20% ( which I haven't done ) that I would be fine.

There's two kinds of revolving (aka credit card) utilization: individual and total.  Individual looks at each card by itself.  If you keep each card under 28.99%, then there should be no individual penalty.  Total counts all your credit limits together.  The penalty there begins at 8.99%. 

There's yet one more scoring factor, which is how many of your open accounts have a positive balance.  FICO will give you a penalty if all of your cards have a zero balance, but aside from that this factor likes to see as many open accounts with a $0 balance as possible.

Ultralow util and AZEO are strategies that many credit veterans don't worry about implementing every month.  That's because those strategies will get you all the extra points you will get in a very short period.  Thus some people don't implement then until 40 days before they need every available extra point.  Most months they just try to keep their util at a decently low level but not really worry much about it.

SO I shouldn't carry a balance on any of my cards except for 1 ?

You should never carry a balance... if you can ever avoid it.  To carry a balance means to not pay the amount in full that is listed on the statement.  Suppose for example one of your credit cards prints its monthly statement showing a balance of $300.  If you pay only $100, then the remaining $200 is carried over to the next statement and you pay a lot of interest on it.  Reporting a balance may be what you meant.  In the example above, $300 was on the statement and therefore the CC issuer reported that $300 to the three credit bureaus.

See what I said earlier about AZEO as a short term strategy.  Many people don't worry about doing it every month.

With zero balance will some of my creditors possibly close my account due to inactivity?

No.  Just use the card once every 5-6 months -- that will prevent closure even if the card always reports $0.  The only caveat is that I'd make sure that a new card does report a balance once in the first 120 days.  There was a guy on here who had an issuer close his card after six months, but his card had never reported a balance even once in its entire history.  Many people have had 13 months of total inactivity (no transactions of any kind) with no threat of closure.

I know you don't know exactly, but what type of impact can I reasonably expect once I pay up all of my cards?

I have no idea.  The thing is that you have a bunch of derogs.  So nobody could rationally say with any confidence.  But just pay all that debt off and see what happens.  Paying it off is smart for a ton of reasons, notably saving yourself interest (and some other reasons as well).

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