cancel
Showing results for 
Search instead for 
Did you mean: 

Guidance on pay down of debt (almost where I want to be)

tag
SSgtUSMC
New Contributor

Guidance on pay down of debt (almost where I want to be)

Professionals & Experts,

     I am hoping that you all fine men and women can provide some guidance on how to go about paying down my debt in order to increase my score.  I have read multiple posts (including some pinned posts and understand that credit utilization is only one piece of the FICO puzzle) and am going to change my tactics from my initial plan which was to pay down my highest interest rate card.  Now I plan to use the $4k to pay down on two cards which are over the 30% utilization ration.  Any thoughts and/or recommendations are appreciated.

 

I have about $4,000 to apply towards my debt on 1 May

 

  • NFCU Amex: $25,000 limit/$1,000 balance/4%  
    • **This card was just opened about 2 weeks ago because I only had 3 open accounts and I believe 5 accounts is recommended**
  • NFCU Visa: $15,300 limit/$5,000 balance/32.68%

  •  

     

    NFCU LOC: $10,000 limit(increased last week from $6k)/$1,000 balance/10%

  •  

    AAFES: $8,200 limit/$4,750 balance/57.93%

     

    Overall:

    $58,500 total limit/$11,750 total debt/20.08%

     

Message 1 of 5
4 REPLIES 4
Anonymous
Not applicable

Re: Guidance on pay down of debt (almost where I want to be)

I think bringing all of your accounts to under 30% utilization is the best play

Message 2 of 5
DebtJoe
Regular Contributor

Re: Guidance on pay down of debt (almost where I want to be)

Not sure what the opinions of others are on this, but if I get crucified for this so be it.

Speaking from experience, if you are in debt I don't think score chasing should be your priority. I would go back to your original plan of paying down your highest interest card first.

It's easier managing utilization when your finances are in order first. It doesn't make sense paying a premium on interest to gain a few points based on an algorithym.


8/1/2018 FICO Scores:

6/29/2021 FICO Scores:
Message 3 of 5
SSgtUSMC
New Contributor

Re: Guidance on pay down of debt (almost where I want to be)

Sir,

     I don't think you will be crucified as this is solid advice that I initially pondered.  Being that my credit cards are close in interest rate and my plan was to use the 4k to pay down my debt, I figured why not also seek to get some points out of it.  I am looking to be debt free in a month or so but as you may already know its waiting for the companies to report new balances so the score can be updated.  I paid down my NFCU Visa from 9k  to 5k about 3 weeks ago and it is still being reported at 9k.  Nevertheless, thank you for the input!

Message 4 of 5
Remedios
Credit Mentor

Re: Guidance on pay down of debt (almost where I want to be)


@SSgtUSMC wrote:

Professionals & Experts,

     I am hoping that you all fine men and women can provide some guidance on how to go about paying down my debt in order to increase my score.  I have read multiple posts (including some pinned posts and understand that credit utilization is only one piece of the FICO puzzle) and am going to change my tactics from my initial plan which was to pay down my highest interest rate card.  Now I plan to use the $4k to pay down on two cards which are over the 30% utilization ration.  Any thoughts and/or recommendations are appreciated.

 

I have about $4,000 to apply towards my debt on 1 May

 

  • NFCU Amex: $25,000 limit/$1,000 balance/4%  
    • **This card was just opened about 2 weeks ago because I only had 3 open accounts and I believe 5 accounts is recommended**
  • NFCU Visa: $15,300 limit/$5,000 balance/32.68%

  •  

     

    NFCU LOC: $10,000 limit(increased last week from $6k)/$1,000 balance/10%

  •  

    AAFES: $8,200 limit/$4,750 balance/57.93%

     

    Overall:

    $58,500 total limit/$11,750 total debt/20.08%

     


That's not too bad. 

Seeing how you dont have too many accounts, I'd pay whatever has the highest APR. If anything is in 0% promo or has low apr, i'd leave that for last. 

 

If you are interested in scoring gain, I'd pay enough on NFCU Visa to bring it below 27% (accounting for interest), and the the rest towards AAFES because it's crossed two utilization thresholds (29% and 49%). 

 

 

 

 

Message 5 of 5
Advertiser Disclosure: The offers that appear on this site are from third party advertisers from whom FICO receives compensation.