Plan of Action

[Harvey26]

Hey Family,

I have approx. 35K-40K in credir card debt
no missed payments
Credit scores between 630-670 depends on CB
Income around 40K-45K

I want to pay off my last two small credit cards by Feb about 5K. Then I want to make on time payments for about a year. NO APPS NO NEW ACCOUNTS.

I have been looking at the Lightstream Debt Consolidation Loan. Rates look amazing. But I do know that Suntrust is pretty conserative. Is there anything else I can do to increase my chances? I will be getting a checking and savings with them to build a relationship.

[Anonymous]

A few questions:

Where are you getting your scores from?

Do you have any cards that are at....

       greater than 88.9% utilization?

       greater than 68.9% utilization?

       greater than 48.9% utilization?

Do you have any derogs?  (lates, collections, chargeoffs, etc.)

Do you have any tools for pulling your reports?  (Different from your scores.)

PS.  Lightstream is a lender that caters to people with high credit scores.  Yours are too low for them (I would expect) though you might be able to raise your scores.

[RonM21]

CreditGuy's questions are important because ultimately, if you are going to app for a loan to consolidate, you want to get the best percentage rate possible. Without that, it may not do you much good. This is where your profile comes into play, because if there are things that have a chance to be taken care of in a fairly short period of time, you want to tackle some of those to bring your scores up before you app. Also, it would help determine what loans out there you may stand a better chance of approval on.

[Harvey26]

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@Anonymous wrote:

A few questions:

Where are you getting your scores from?

Do you have any cards that are at....

       greater than 88.9% utilization?

       greater than 68.9% utilization?

       greater than 48.9% utilization?

Do you have any derogs?  (lates, collections, chargeoffs, etc.)

Do you have any tools for pulling your reports?  (Different from your scores.)

PS.  Lightstream is a lender that caters to people with high credit scores.  Yours are too low for them (I would expect) though you might be able to raise your scores.

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BBT: BALANCE 3700 LIMIT: 5500 (67%) WILL BE PAID OFF SOON

BLISPAY: BALANCE: 1000 LIMIT: 5800 (18%) WILL BE PAID OFF SOON

DISCOVER: BALANCE 11200 LIMIT: 21900 (51%) 

NAVY FEDERAL: BALANCE: 8500 LIMIT 21500 (40%)

NAVY FEDERAL: BALANCE 13300 LIMIT: 15000 (90%)

VIRGINA CREDIT UNION: BALANCE 2215 LIMIT 8500 (26%) WILL BE PAID OFF SOON

WELLS FARGO: BALANCE 1520 LIMIT: 4000 (38%) WILL BE PAID OFF SOON

BOA: BALANCE 3579 LIMIT: 8000 (45%) WILL BE PAID OFF BY JUNE (THIS ACCOUNT IS CLOSED W/ BALANCE)

NO DEROGS OF ANY KIND

[Anonymous]

Don't apply, bring the utility down a bit on those above 48%, there should be a boost in score for you to consolidate the rest.

Edit: Go ahead and zero out those with the lowest utilities also

[Harvey26]

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@Anonymous wrote:

Don't apply, bring the utility down a bit on those above 48%, there should be a boost in score for you to consolidate the rest.

Edit: Go ahead and zero out those with the lowest utilities also

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That was the plan to pay down as much as possible and not app until like the end of next year. Thank so much for the advice. 

[Anonymous]

You have your eyes on the prize. It’s been my experience that TU considers overall utility while the others consider individual. When in actuality both matter.

That is why I suggested bringing down that 90% a bit, if you can eliminate those lower balances, do that first to save on interest, God bless those high CLs

[Anonymous]

Paying off smaller balance cards should be a lower priority than paying down cards with a very high utilization.  VHU cards can be a cause for the CC issuer to classify you as high risk and to begin "balance chasing" you.  And of course they hurt your score.

Personally I would make as your top priority getting all VHU cards to under 67%.

[Harvey26]

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@Anonymous wrote:

Paying off smaller balance cards should be a lower priority than paying down cards with a very high utilization.  VHU cards can be a cause for the CC issuer to classify you as high risk and to begin "balance chasing" you.  And of course they hurt your score.

Personally I would make as your top priority getting all VHU cards to under 67%.

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Only one is over 67% and thats my Navy Federal which was a balance transfer

[Anonymous]

As far as the individual utilization penalty goes, FICO looks at the card with the highest utilization.  Whether you have three cards at that level or one doesn't matter.  It's therefore in your interest to get that card to under 87% as swiftly as possible.  (If it is at a 0% interest rate, then getting it to under 88.99% is enough.) 

Then strive to pay it down to under 68.99%.  And so on.

The breakpoints in the FICO models for individual utilization appear to be 89%, 69%, 49%, and 29%.  For total utilization they appear to be the same except that there is an additional bonus at 9%.  Remember you need to get under each breakpoint.  Thus they are often rendered 88.99%, 68.99%, etc.

There is some debate about whether 9% might also be a breakpoint for individual utilization at 1-2 of the three bureaus.  If it is, the scoring advantage is extremely small.