@pace_it wrote:My husband and I are wanting to buy a house in the next 2-3 years and have decided to really take an active role in paying off debt that we've accrued over the years. I'm trying to figure out the best way to tackle this while also working to improve his "thin file": he is currently a co-applicant on our auto loan and also has a paid-off 10 year old auto loan on his record. Everything else is in my name alone. Below are the details:
My scores: TU 706/EX 715/EQ ? (should be similar) 1 TU inquiry that will fall off in September
His scores: TU ?/EX 728/EQ ? - 1 TU inquiry (same as mine)
No negative marks, 100% payments made on time, newest account is 20 months old, etc.
Balances:
Discover Card: $20,500 @ 16.99V% APR, 98% utilization, min payment $420
Visa FCU Card: $4,850 @ 6.90% APR, 97% utilization, min payment $120
Auto Loan: $7,065 @ 8.10% APR, 45 months remaining, $185/mo
I've already moved all bills, recurring charges, etc, off of the credit cards except for one minimal charge per month to keep them active. We just paid off our other vehicle this month, so I have an extra $500 per month to apply in addition to any windfall, bonuses, extras we receive. We have also moved to a cash allowance to reduce temptation of further spending on the cards.
My first thought was to go ahead and tackle the "monster" avalanche-style and pay down the Discover balance first. However, after reading a few similar threads on here, I'm now thinking of knocking down the Visa card to below 30% utilization - which should be achievable by the end of the year - and add my husband as a joint user to help build his account history. Once that has been accomplished, I would then shift focus to paying down the Discover card in hopes of eventually receiving a few decent BT offers. I would eventually like to add my husband as a joint user on the Discover card as well, but am also aware how that may play into the timeline with buying a home.
I'm not really worried about the auto loan.
So what are your thoughts on this repayment plan: any improvements, changes, or other ideas I should consider? Am I going to be setting myself up for balance chasing with Discover as I pay it down?
Any advice is appreciated.
I recently wrote a post about my credit build I did from August 2019 until June this year. I'll share the link in case you wanted to check it out. I was able to get rid of $10,200 in credit card debt and I had been carrying 100% utilization for about 6 years in a row, now I have 0% utilization.
My recommendation for y'all would be to use the snowball method and start with FCU card. Pay as much as you possibly can to that balance. Up to you on how much to pay on Discover. Usually with the snowball method you attack one card with all the money you can and only pay the minimum on your other cards but I tried to pay more than the minimum on my other cards during my rebuild (see my post for more details). After you pay off the FCU then put everything you can on the Discover card. Also see if your husband can get approved for his own credit card (either unsecured or secured) to help his profile. Have him keep the utilization under 8% each month. I think that you will be able to get to your goal in a decent amount of time once you get the ball rolling! Rooting for yall, you can do this!
@pace_it wrote:@SlideOrInsert Way to go! That's inspiring.
We're in the same boat: I could take a big chunk out of this by using our emergency savings or long-term savings, but I would rather not do that. We've already trimmed the fat from our monthly expenses and are trying to focus on not only eliminating debt, but also making sure our HSA, 401K, and IRAs are not forgotten. Finding the balance between it all is tough.
Not trying to force the philosophies of Dave Ramsey down your throat but his advice is to only have $1000 in savings and then put everything you can towards attacking the debt. Also he recommends pausing payments to investment and retirement accounts until you get out of credit card/ loans debt. Once the only thing that is left is a mortgage then he has people resume those contributions. If you decide to use some savings and pause these contributions you could speed up the process of eliminating the credit card and auto loan balances. Definitely up to y'all though.
Thanks for the advice, everyone. There's a lot of good info here for me.
We just cancelled a trip we had planned on taking this fall, so I'm going to take and put $1500 from that money as a lump payment between the cards. I also looked at our emergency & long-term savings balances and found where I can cut some monthly deposits to instead reroute toward debt. That should add another $300/mo: now making payments $1500/mo total.
I'm going to continue the HSA & IRA payments since they're minimal but add up over time: I work for a small family-owned business so I don't have those as employer-funded benefits. We also make use of the HSA for medical expenses.
Additionally, we're going to look into a couple optimal card options for my husband with BT offers in mind. Feel free to throw in any suggestions to research.
I don't have a problem with Dave Ramsey (other than maybe his ELP program for insurance brokers, but that's another story) and tend to combine his debt advice with that from financial blogs. My initial goal was to have one month's expenses immediately available for emergencies. But, I can make do with $1,000 in place of that and falling back on our long-term savings as the excess while paying this down.
Thanks again for all the help! I'll keep this updated as progress continues. 
Really impressive to see the progress you've made!
