Personalized Tips to Improve Credit Score

[Lefty061182]

Hi All, a newbie here and looking for advice/guidance on how to address my personal situation to improve my credit scores.

I have spent some time looking through previous posts related to this, but I feel everyone's situation is unique and the advice provided to them is based on their own data points.

Any advice would be appreciated, as I read so many posts and just confused on where to  focus and what would have the most significant impact on my profile. Or even advice on what to prioritize. My approach has been to focus on one card and pay it off, keep it open, then move to the next.  I use CreditKarma, but is there another site(s) I should be signing up for to receive other scores/models?

Situation:

I have several cards that are at, or near, being maxed out, but never a late payment ever.

I also have a few cards with barely any balances on them.

All detailed below.

I only have used CreditKarma thus far to try to focus on and repair my credit. Been with them for over a year since I began to focus on this stuff. I log in each week to get my 2 new scores and reports. Current scores:

TransUnion Vantage 3.0 score (via Credit Karma) - 606

Equifax Vantage 3.0 score (via Credit Karma) - 608

Credit Karma Dashboard

Hard inquiries - 1 - Chase Auto 7/15/17

23 Open Accounts (detailed below)

17 Closed Accounts - 3 auto loans, 7 edicuation loans, 5 credit cards, 2 installment

Credit Age - 8 yrs 2 months

Derogatory marks - 0 (no collections, no public records)

Credit card use 57% ($43,087 out of $75,500)

Payment history - 100% (0 late payments)

Open Credit Card Accounts (balance/limit)

1.Bank of America 7k/7k

2.Citicards 3.8k/3.8k

3.Citicards 3.7k/3.7k

4.Synchrony/Amazon 3.2k/3.2k

5.Macys  4.4k/4.5k

6.Barclays Bank 4.9k/5k

7.Capital One 3k/3k

8.Capital One 1.4k/1.5k

9.Discover 2.4k/2.5k

10.Credit One Bank 2.3k/2.4k

11.Capital One 700/750

12.Best Buy 1.3k/1.5k

13.Dell 2.5k/3.5k

14.First Premier 14/1.1k

15.First Premier 14/900

16.Bank of America 40/5k

17.Bank of America 80/7k

18.Kay Jeweler 0/7.6k

19.Chase 0/1k

20.Milestone 0/300

21. American Express Platinum 314/no limit (big purchases require approval)

Open Installment Loan

1. One Main Financial - $1 balance (basically paid off)

Open Auto Loan

1. Chase Auto Finance $7,843 (in good standing/no late payments ever)

I also have 3 closed BMW Financial Services auto loans. All 3 show all 100% of payments made on time.

[DollyLama]

Hi Lefty and welcome to the forums!

You have so much good working for you- a thick file, clean file (no lates or derogs), good credit mix, and decent lines of credit. Not actively credit seeking. 

Your scores are all on the extreme high utilization. I know you spoke of the snowball method, however with the exception of the 4 accounts First Premier and BOA under $100, pay those off, sock drawer away all zero balance cards. With goal of as utilization drops, rid yourself of the sub prime cards, ie, Milestone, First Premier, Credit One, maybe some low end retail cards. But only when utilization drops, you don't want a card that you pay annual fees, never grants decent lines of credit and works for you. 

So once the 4 are paid off, you in my opinion need to work on aggregate utilization more than chipping at individual utilization at this time. So many are riding high in the 90%-100% max, that it is in extreme danger of adverse action, balance chasing, or worse, closing accounts on you that have a balance. You want to avoid this at all costs. First threshold would be aggregate on each card under <88.9, then to under <68.9, and longer goals, to <48.9 to reach the good range and biggest bump at under 28.9%, then you can snowball the highest APR cards. 

Is the money feasible at the time to knock quite a few down now? If not, are you able to make 2-3 X the minimum payment, or only able to afford the minimum?

This is the sole culprit I see in your scores not being high 700s if not already in 800 range. 

Your Discover card score you get with statement is a true FICO 8 score (so you can see where you really stand FICO vs. the hard to compare, Vantage Scores that lenders rarely use. Even Capital One's Credit Wise with your account is a Vantage Score. 

[LakeLife]

DollyLama gives amazing advice.  Good luck on your road to recovery.  It's not going to be easy, and you are going to have to change some credit habits you've picked up in the past.  I'd suggest for the time being you give up any frills such as eating out and even cable in your life to get ahead of this.  

[Anonymous]

DollyLama’s plan is dead-on. Taking those minimal-balance cards to zero will help you as FICO likes to see no more than 1/3 of your cards carrying a balance. Knock those off to get a start on the collection of cards sitting at zero. Also, that’s a number of accounts you won’t have to worry about, although after you pay them off, check them again at statement cut as you’ll likely have some small trailing interest show up and you’d be beside yourself if you didn’t catch it and ended up with a 30-day late and a 100-point hit for $3.

As asked above, what kind of cash do you or will you have available to pay on the others, say over the next month? Certain lenders are more risk-averse than others and knowing what you have to work with in the immediate future can help us direct you which of the high balance cards to address first. All of them need to be brought down through the utilization percentage thresholds mentioned, but some may be better dealt with say this week, whereas others can wait a couple weeks.

[CreditInspired]

Hi OP and welcome

Kudos to you for reaching out for help. If you follow @DollyLama advice, your scores will increase—slowly, but surely. And all the other posters have provided excellent advice too.

You don’t say what the APR is on your CCs and I’m assuming it’s somewhere between 18-24%. If yes, it may be a good idea to contact lenders and request an APR reduction. 

Do you have a lump sum of money to work with! If yes, provide us with the APR on every CC that’s maxed out, and we can provide even more pointed advice or suggestions. 

It’s great that there are no late payments. You are already ahead of the game. So, if you don’t have a lump sump, what do you have left over after bills that you can put toward your cards?

Then, lastly—an important question. Are you using your credit cards to just buy stuff you don’t need or are you using them in place of income?  If it’s the former, stop using your cards! Immediately.

If it’s to meet needs payday to payday,  then you may have to consider a hardship program. 

The more detail you provide us, the better the advice we can provide you. 

GL2U

[Anonymous]

A few observations:

I notice that you are using Credit Karma as your chief credit monitoring tool.  When you say that you have no lates (100% perfect payment history) bear in mind that Karma's front-end summary page will often describe a person as having perfect payment history when he has several lates -- if those lates are 25+ months old.

It's therefore in your interest to use a few other tools to confirm that you have no lates of any kind.  Pulling your full reports at AnnualCreditReport.com would be a good move, as would implementing the $1 trial offer at Credit Check Total and then cancelling it.  Your goal here would be careful scruitiny to make sure that no lates have crept into your report anywhere.

I noticed also that you have gazillions of credit cards.  That suggests the possibility that you had some past difficulty controlling your ability to apply for cards -- that perhaps there was something about the thrill of applying and approval that influenced what should be a cool detached emotionless choice based on self-interest.

I encourage you to stop applying for credit cards for the next three years -- and if you ever resume, limit yourself to one per year and only because there is a huge advantage (e.g. a huge signup bonus that you can meet purely through absolutely necessary spending).

Dolly Lama has given you great advice as usual.  Continue to work with DL and best of luck.

[Lefty061182]

Thank you DL, should I be cancelling any of them once paid off? Any good or bad to that?

[Caardvark]

I cannot argue with any of the advice you've received thus far. They are some of the most experienced and well-educated members of these forums. They gave you great advice, I hope you follow it.

I have only one add -- Looking at your lenders, it's clear you are paying a lot of interest. And, since you are currently able to pay all of your bills, once you sart knocking out the highest interest ones, you should have more and more money to throw at the others (since you'll be saving on the interest). Once you get your utilization down to below 28.9% I'd start looking for a 0% Balance Transfer card to move as much of your remaining high interest debt as you can. Again, the interest savings will allow you to pay everything off quicker. Or, perhaps a debt consolidation loan through a credit union. I'll wait until one of the experts chimes in but you m ay even be able to do that at a higher utilization than 28.9%

[DollyLama]

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@Lefty061182 wrote:

Thank you DL, should I be cancelling any of them once paid off? Any good or bad to that?

---

Milestone once you pay in full ( as suggested make sure no lingering interest) close immediately. It is such a low limit card, it won't affect your utilization., the First Premier's would be next along with Credit One, those are more starter cards for rebuilding, and you have established Bank credit cards, BOA, Discover, Amex,etc. They have served their purpose to get you to the Bank Cards. I know Milestone has an annual fee, pretty sure FP and Credit One might, once they are paid in full AND utilization is down, close them. You don't want to pay to use a card. Should be geared more to cards that reward you, like Discover with cashback, and the 5% quarterly categories. 

But wait on FP and Credit One until your utilization is down <28.9% total aggregate, and can incorporate the snowball on these, once paid in full, close them. 

Maintaining a good relationship with the bank cards, is responsible usuage, not carrying each and every month 90-100% util on each card. As they are paid down to the threshold, they will value you more as a customer, credit line increases will grow better. 

But as one person stated, if you are using this to carry your food, gas, withdrawals against cash limit to make ends meet, there it could snowball the other way. Account closures. They will do this on even a timely payments, it scares creditors, and other creditors follow suit. The balance chasing, pay down $200, your credit limit drops $200, unending 100% individual utilization until paid off. Or as spoken before, the will close you down with a balance of 4-5k, you still making the timely payments but your utilization becomes over 100%. 

Really need to do anything to start hitting those thresholds across the board on all the credit cards. 

We don't judge on past credit habits. We help to encourage and direct you to the scores you want to be at rightfully. If you do have extra funds, from tax refund, a bonus check at work, let us know, and we can tell you exactly how to distribute them. There is no greater feeling when your scores start rising, that it becomes a habit to be on top of your scores. One day you will need a new car, or perhaps a mortgage, and all this comes into play. You want to be able to jump the gun for that auto, and not worry that you have to wait 6 mos or 1 yr to get the scores and rate you need. Same for a home. Always prepare for the future.