Too Much Debt

[Anonymous]

I'm trying to qualify for a new home loan but the lender has suggested that I first pay down some of my outstanding debt.  I am in a position to pay down some but not all.  What is the best approach to take at this point, pay off the lower balance ccc's or the higher balance ccc's?  For example, I've got $23k in debt and $13k cash.  Two cc's with $5k balances and a few other cc's with balances ranging from $100-$600.

[Junejer]

Is all of the debt CC debt or is there installment debt too?

If you don't mind, breakdown the debt by TL and balance.

[Anonymous]

$21k in credit card debt; Department Store $7k, Visa$11k, Gas Card $2k, another department store $600, Amex $400, and a 401k loan of $2.3k. 

[Junejer]

I'm sorry that I didn't ask this before, but what are the CLs on these cards?

[Anonymous]

Sorry I'm not familiar yet will all the acronyms.  What are CL's.

[llecs]

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Jazzie wrote:
Sorry I'm not familiar yet will all the acronyms.  What are CL's.

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Common Abbreviations

[Anonymous]

Credit Limit on the department store 1 is $7,500; department store 2 is $3,000.00; Gas card limit is $2,500; Visa is $15,000 

[Junejer]

Many ways to do this and many different opinions will certainly surface. If it were me, I would pay off the Amex ($400), Dept store ($600), Gas Card ($2,000), Dept store ($7,000), and Visa ($3,000). This will leave only one card with a balance $8,000/$15,000. From a scoring standpoint, this is a very good method, because you will have a bunch of CCs with $0 balances. Then, you can take the payments that you were making on those cards and apply those towards the visa.

[Anonymous]

Thank you soooo much, this is very helpful.

[Junejer]

You're welcome. GL