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Please Help! - Utilization

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Chrisla2077
Established Contributor

Please Help! - Utilization

 Hi All, MODS delete if necessary i didn't mean to post this twice.

 

I've been tryng to re-build my credit for several years now and have managed to increase my score from a 450 to the 650s. Part of that growth was obtaining several (too many) retail and major CCs to help build positive history. However, after hitting another pocket of financial difficulty, those credit cards have high utilizations which lead to 1 30 -day late payments on a couple of  the accounts. I'm having trouble keeping up with the minimum payments, so what I would like to do is either lower my utilization enough to obtain a 0-interest CC special from NFCU (I'm a member) or other company where I can transfer my higher balances and work to pay them off. The interest rates on my major CCs are so high, when I make the min payment I have ot use the available credit and the payment effectively erases itself. I'm soon to get a $700 bonus from work, and while I know that it is not much in relation to my balances, I would like to use it as a jumpstart to get the best bang for my buck / highest score increase from this jump start. My balances  / utilizations are as follows:

 

Cap 1 Secured - $600 / 100%

Cap 1 Ven1 - $3300 / 100%

Cap 1 QS1 - $2200 / 100%

BOA Secured - $600 / 100%

Macys - $1500 / 100%

Walmart - $1500 / 100%

Amazon Store - $1200 / 100%

ExpressNext - $807 / 39%

 

Should I use the $700 to pay off 1 of the lower balance cards completely, use the entirety on one of the larger balances, or spread out the money among several cards (if so in which order)? I'm working on getting some extra income to pay off more after this, but again. I'd like to know what the best to help me get utilization down as quickly as possible. In past applications, that has been the most common reason that I have been denied. 

 

2) I also have a medical collection that was paid more than a year ago through the OC, but the CA is still reporting it as an active collection with a full balance. I haven't disputed this with the CA's yet, because I would like to take care of this with the maximum effect Smiley Wink 

 

Any help with this would be greatly appreciated via response to this or through PM. 

 

Thank you!

 

 

Message 1 of 8
7 REPLIES 7
rmduhon
Valued Contributor

Re: Please Help! - Utilization

Put 100 towards each maxed out card to avoid going over the limit. Do this in addition to the regular payment you'd be making this month anyway. Unfortunately, recent lates can cause denials for new cards. You might want to talk to NFCU about a loan to knock out some of the cards, but only if you can be sure that you won't use the cards again.
Message 2 of 8
Anonymous
Not applicable

Re: Please Help! - Utilization

NFCU might be able to help you with a debt consolidation loan, but they require you to close all of the accounts for that type of loan. I'm afraid with your COs and lates..UTI and your DTI ratios it's highly unlikely they will gve you a CC or reg loan (they tend to frown on all of that).

 

What you can do now, is

 

Cut out anything that is not needed to survive (eating out, movies ect..)

 

Stop using your CCs

 

Contact issuers and ask if they might lower your APRs to get a handle on your payments

 

Consider closing CCs and set up a "hardship repayment plan", it's better if you do, then them closing/charging off or have lates pile up on you

 

Take that 700.00 and put it on your lowest bill and then once card is payed off, tackle the next one (it's called "snowball" method)

 

or

 

If you can you might apply your money (extra) to each account to bring it down to 75% at first, that will help your score some but not allot with the history you gave

 

make min payments every month without fail

 

but you need to be aware that once CC companies get wind of your lates/maxed out cards & collections they may close your accounts or "balance chase" you, that's where they do a credit line decrease as you pay it down so your UTI stays high no matter how much you pay off

 

If you can take on additional employment or babysit or even sell stuff and put every dime towards your debt, but you can do it...it takes time to get out of debt but you have to want to do it and stick to your plan once it's set

 

Good luck on your journey!

Message 3 of 8
Anonymous
Not applicable

Re: Please Help! - Utilization

For immediate results I would get the smaller ones down to under 30%. Then use the remaining amount in conjunction with your monthly payments until you can get those down to under 30% as well. Then work on paying off your cards starting from the smallest (still paying minimum balances every month of course), and once paid off leave leave them alone unless absolutely necessary while you work on paying the other cards off. 

 

 

Id also dispute the error in reporting with the cas AND I'd send a gw letter to the oc asking that they remove it from your report altogether. Maybe they will. Maybe they won't but it won't hurt to try.

Message 4 of 8
Chrisla2077
Established Contributor

Re: Please Help! - Utilization

Yea i definitely figured that this would be the course of action. I don't want to close my accounts if possible. I'll just slow walk it all. 

Message 5 of 8
Chrisla2077
Established Contributor

Re: Please Help! - Utilization

Thanks Fixing credit, I was thinking that this might be an option that would help. Through a mistake  one of my smaller cards reported w/ a $0 balance and I caused a large jump in my score. So now that the error is corrected, I want to try to do this to help.

Message 6 of 8
Anonymous
Not applicable

Re: Please Help! - Utilization

If I were you I would close out the secured cards & pay those cards off with the deposit $ then use your bonus to pay down the Express card.
Message 7 of 8
Chrisla2077
Established Contributor

Re: Please Help! - Utilization

The only problem with this...is  that I would have to use the bonus to pay the secured cards off..so it would no longer exist. Half of the balance on the secured cards is unsecured. I negelected to mention that. 


@Anonymous wrote:
If I were you I would close out the secured cards & pay those cards off with the deposit $ then use your bonus to pay down the Express card.

 

Message 8 of 8
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