@Anonymous wrote:
Hello,
This is my first post, although I've been reading posts from others for quite some time now.
Quick story/background: In early 2017, my scores were around 770ish FICO 8. At this time I was spending amounts that I could PIF, reporting only balances under 10%. The plan was to apply for a mortgage. Things changed when my husband lost his job. This is when everything in my plan went south. I ended up having to use credit cards like crazy to keep up. I racked up balances to 98%. FICO 8 went to 706-709 3B. No Lates, Baddies. Recently, I thought applying for New Credit would help With Utilization while I pay these accounts down and I went on an mini APP Spree ( no INQ on reports), bad idea. Scores are NOW EX:661, TU:686 EQ:701
Old Cards:
CAP 1 QS: 2400/2500
CAP 1 QS:5600/5800
Disco:9500/10500
Disco2:3700/4000
CU:10000/11000
CU:9000/10000
Denied for all CLI in the last year except for CU for $1500 * 2 total $3000. CAP 1 never ever gives it to me, regardless.
Auto loan 1: 11000/33000
Auto loan 2: 14000/28000
New Accounts:
CITI D.C: 5000 limit
CITI SIM: 1000 limit
AMEX: 1000 limit ( not reported yet)
Was most likely given the low limits due the high Utilization, no other factor could be possible.
I can't afford to PIF any of my accounts just yet. Income on Taxes is $160k. This year Will be around 100k unless business is better. Tons of bills, 1 kid in college, 1 kid about to start college, 1 kid with multiple medical conditions( medical bills).
Question is? Should I pay these to 50% first goal, next goal to 30% and next to 10% or should I use the money to pay in full on any of them, while paying minimum on others. Will take me some time. Also worried about AA on the Old accounts and would like my plan to avoid this if at all possible.
Thank You.
Most people are likely going to recommend something like this. Lowering utilization on all of your cards is a very good way to increase your scores. However, you are also going to increase your score significantly by getting as many cards as you can to report $0. (except for one you leave a small balance on at the very end.)
Lenders may or may not take AA. It is what it is. You are in a serious financial crisis and resolving that is priority #1. The scores will follow and the credit limits will go back up eventually.
I would either debt snowball (pay off the smallest cards first while paying minimums on the others) or pay off the highest interest cards first (saves you the most $) or sometimes it can be a mixture of the two if interest rates are similar and you just want another balance gone.
However you do it, just focus on throwing everything you can at the target card while paying minimums on the rest. When it's paid off start throwing everything you can at the next card.
If you have equity in the two cars, I would sell them and buy cars for cash. Then roll your old car payments into your debt paydown. I'll never have a car payment again regardless, but I surely wouldn't have one if I was carrying credit card debt. You have to a build a budget and a savings to where the next job loss/life event/whatever doesn't do this to you again 
I would get a personal loan. You can try Upstart, Prosper or LendingClub. The APR is lower, and your score will skyrocket. You will need to get a loan for the amount of your CC debt. Then pick a card and sock drawer all the rest. Then do not put more on the card then you can afford at the end of the month.
I did this and my scores when from 651 to 798 in 2 months. I'm still paying on the personal loan, I went with Upstart, I pay the exact same amount as I was paying to the CCs, and my 5 year loan should be paid off in 6 months.
I hope this helps.
@Anonymous wrote:Since avoiding AA is a very high priority, here is the order in which I would make my decisions:
(1) Never ever be late on any required payment.
(2) For your credit cards, double the minimum payment and then add $1 to that -- then make that payment on every card every month. Making only the minimum payment is a behavior highly associated with risk, and can result in AA.
(3) Lower all highly utilized cards to under 87%.
(4) Lower all cards to under 67%.
Then pay off your debt in the way that makes you happiest. The mathematically soundest approach is to funnel all extra cash against the highest interest cards -- if some cards have a much higher rate than others. If they all have a similar rate then some people like paying off smaller balance cards first, which can give them a feel of accomplishment.
+1
Agreed
First priority here is to get off lenders' radar screen
