Seeking advice on how to improve credit when utilization is high

[tcbofade]

When closing them won't cause your overall utilization to cross a known scoring threshold.  (  8.9%, 28.9%, 48.9% etc)

DW and I have both been there... and now the cards that are sitting empty are Amex, Citi, Chase, Discover, etc...  the quality of our sock drawered cards has improved greatly over the last ten years or so.  

[Expansion]

I am laughing about the quality of your sock drawer cards improving.  Gives me hope and inspiration for me to do the same!  Thank you for the benchmark of the thresholds - that's a very helpful rule of thumb

To be continued!!

[Expansion]

One more question...  with your super low APR credit cards - how low are we talking?  Which cards are they?  How did you get these prized jewels?

Thank you always

[Anonymalous]

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@Expansion wrote:

One more question...  with your super low APR credit cards - how low are we talking?  Which cards are they?  How did you get these prized jewels?

Thank you always

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Dow Chemical CU seems to be the best that's widely available (if you can get in via the backdoor). 6.9%, and it's a fixed not variable APR, so it won't swing with the prime rate (though they can always raise it, so it's not a guarantee). @galahad15 has a longer list: https://ficoforums.myfico.com/t5/Credit-Cards/Simmons-Bank-Visa-or-regular-low-interest-cards/m-p/64...

There are also FIs that have issued cards in the 3% range, but with variable rates, so they've been rising with the prime rate. The lowest APR cards at Space Age and San Fran CUs, for instance, are about 5.5% now. Might be worth checking your local credit unions. CUs typically have far better APRs than banks.

[Expansion]

OK, I got my letter today and here's what they said:

-->and then here's what I"m thinking about each point.

You've reached Navy Federal's Maximum Unsecured Credit Limit

Your Navy Federal (internal) credit score: 271 (seems super low)

Date: 8/20/22

Key factors that adversely affected your Navy Federal credit score:

Balance Status of Navy Federal Accounts

-->As of the date of the letter, my CC had a balance of $3,200 out of $10,000.  This week I paid it down to $0.

Insufficent variety of secured loan accounts

-->None of my loans are secured.  I have a loan with PenFed (from March 2023) and Upstart (November 2022).

I am totally open to doing Pledge Loans with Navy Federal--would this help?  Some of my clients pay me in advance, so it wouldn't be hard to do a pledge loan for $5k or $10k, especially if I paid it back earlier than the term, thus making the money available to me sooner.

Revolving account utilization over the past 12 months

-->Well, at the date of the letter, everything was under 67%, down from where it was at the beginning of the thread (87% and higher), and I am definitely going in the right direction here.

Direct deposit status with Navy Federal

-->since I'm self-employed I don't really have the option to do direct deposit like an employed person does.

Hypothetically I could switch my business and personal checking over to Navy Federal but it feels like a huge hassle with my business credit card processor and everything.

Number of Inquiries on Credit Bureau report:

-->I looked up my TransUnion report from 8/16 (presumably what they would have uplled)

and there was only one inquiry, from my Upstart loan, on 11/19/21, 9 months ago, which honestly doesn't seem bad to me.

An overview of my relationship with Navy Federal so far:

I joined in 2017

I applied for a CC and was denied

I wrote a reconsideration letter and received a card with a $10k CL -- I was pleasantly shocked.

Because I was going through hell financially at that time, I put on a high balance and then carried that balance and made all my payments on time.

Since this spring, I paid the card down entirely

so I could move my Discover balance to the Navy Federal card with no fee,

and then transfered that entire balance back to my Discover card so I could use a Discover BTO.

So there was a $0 balance on the NF CC.

Then I added a $4k balance on the NF card in June

(had to replace my work computer -- for the first time since 2016, and the only time I've added to my balances since starting this thread). 

Now that balance is completely paid off three months later. 

How can I improve my internal score?  Thoughts?  Suggestions?  Insights? 

@tcbofade @K-in-Boston  @SouthJamaica @FinStar 

[Expansion]

thank you @Anonymalous! I appreciate your research and experience here. 

I like knowing about the Dow Chemical card,  with a go-to 6.9% fixed rate (not "as low as")!  And a way to join through the backdoor ($10 donation to their scholarship fund, easy). 

Though I sense if galahad15 is getting denied repeatedly, it is not an immediate solution for me, since they are in a better position than I currently am

[tcbofade]

Thank you for sharing the information from NFCU.

Sadly, the "you have reached the maximum unsecured credit" speil generally means that NFCU has extended all of the unsecured credit to you that they are comfortable with... at this time.  Wait six months, then try again.

All things in time!

[K-in-Boston]

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@Expansion wrote:

OK, I got my letter today and here's what they said:

-->and then here's what I"m thinking about each point.

You've reached Navy Federal's Maximum Unsecured Credit Limit

Your Navy Federal (internal) credit score: 271 (seems super low)

Date: 8/20/22

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The range is 100 to 450.

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@Expansion wrote:

Insufficent variety of secured loan accounts

-->None of my loans are secured.  I have a loan with PenFed (from March 2023) and Upstart (November 2022).

I am totally open to doing Pledge Loans with Navy Federal--would this help?  Some of my clients pay me in advance, so it wouldn't be hard to do a pledge loan for $5k or $10k, especially if I paid it back earlier than the term, thus making the money available to me sooner.

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They're implying things like a mortgage or auto loan.

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@Expansion wrote:

How can I improve my internal score?  Thoughts?  Suggestions?  Insights? 

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Mostly the same factors as improving your regular credit scores.  You're making progress, just keep with it.

[Anonymous]

Expansion

Know that Discover Card over time will consider requests for a permanent lowering of the Apr. In reading around, people have requested to lower and got it. Sometimes it will take more than one request but, they generally come through. Some of us actually got them to lower below the posted lowest online rate so keep your options open 

[Expansion]

Thank you @tcbofade , @K-in-Boston, and @Anonymous ! 

I will plan on trying again for a 2nd Navy Federal card in 6 months.

In the meantime... with the PenFed prequalified offer that expires on 8/30:

I paid off the Navy Federal balance from $3200 of $10k down to $0

in part to increase chanches of this PenFed pre-approval actually going through.

The Navy Federal statement cut yesterday.

So if I apply for PenFed today, will the credit reports show that the NavyFed balance is now $0?

Is there a lag between the statement cutting and the credit reports updating?

Should I wait for the last day to apply, or ask for an extension on the offer, to increase the chances of them seeing the updated, more favorable Navy Federal $0 balance?

Thank you always for your insight, support, wisdom, and experience,

as I navigate this terrain!