Major help

[Caitt]

Hello I am coming for advice on what I should do. I was thinking of a consolidating loan, but have been denied. Based on CCT my credit score is 605. I worked so hard to building my score up to purchase a house, and things just went downhill with my credit. I have included all of my credit cards and limits. Any advice?


I also have a loan that is $2800.
Discover IT $371 with $500 limit
Navy Federal $985 with $1000 limit
Capital One $9875 with $10000 limit
Capital One $0 with $200 limit
American Express $407 with $500 limit

$11,638 of $12000.


I've also tried to get some cli and all declined.

[Anonymous]

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@Caitt wrote:
Hello I am coming for advice on what I should do. I was thinking of a consolidating loan, but have been denied. Based on CCT my credit score is 605. I worked so hard to building my score up to purchase a house, and things just went downhill with my credit. I have included all of my credit cards and limits. Any advice?


I also have a loan that is $2800.
Discover IT $371 with $500 limit
Navy Federal $985 with $1000 limit
Capital One $9875 with $10000 limit
Capital One $0 with $200 limit
American Express $407 with $500 limit

$11,638 of $12000.


I've also tried to get some cli and all declined.

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with this much utilization, any new credit for you is pretty much going to be off the table.  So, my advice would be to work to reduce your utilization incrementally.  Here are the steps:

1. STOP using your credit immediately - no new charges on any cards

(if you cannot do this because it requires using the money you pay into the cards to stay afloat, you can ignore the rest of the steps because it's probably time to seek the advice of a Bankruptcy attorney)

2. Prioritize your payments to get all balances under 90% of limit

 (start with getting Navy down to $900, then the big Cap One down to $9000)

3. Continue until all balances are under 80%

4. Continue until all balances are under 70%

5. Continue until all balances are under 60%

6. Continue until all balances are under 50%

7. At this point prioritize paying off all of your smaller cards except Navy - your score will benefit more from having more accounts at zero than non-zero vs. reducing total utilization

(You MAY qualify for a consolidation loan at this point - if so, use it to kill off everything but Capital One - that will have a larger score impact as above)

8. Pay down to 30%

9. Pay down to 20%

10 . Pay down to 10%

11. You're done - now you just have to ensure your balances never go above 10% again (except in an emergency) and you can watch your credit get better and better

Good Luck!

[Anonymous]

Hi Caitt.  Sorry you are in trouble.  I'm sure folks here will do what they can to advise you.

Here are a few quick questions, the answers to which may help people here guide you.

(1)  You write "I worked so hard to building my score up to purchase a house, and things just went downhill with my credit."  Worked and went are past tense. Does that mean the home purchase is something that happened in the past -- and that since then you have incurred a lot of CC debt?

Or does it mean that you are hoping to buy a house sometime soon, and are working to improve your scores to make the home purchase possible?

(2)  You list the exact amounts of your total CC debt and credit limits.  But when I added up your CLs I got a slightly different number for your total CL.  You give it as $12,000 -- but it looks like it may be $12,200.  That's only off by a tiny bit, but it's useful to have your numbers right.

Given your situation, there may be nothing to do except cut your spending and expenses to the bare bones and start paying down your CC debt.  After you succeed at getting all your cards down to < 69% of their credit limits, your score will have improved a fair amount, and then a consolidation loan may be an option.  But... a loan is only a good idea at that point if you switch to using debit cards and have someone hide your credit cards.  You should not be using the CCs again until you have paid off your CC debt.  Otherwise the loan will just liberate your CCs and you will be in danger of running them up to their limits again.