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Where to go from here....

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Where to go from here....

Over the last several months I have tried very hard to reduce our credit card debt.  I've done a great job and moved my score from a 615 to 700 in just a few months, but now I think I am at a standstill.  My husband went up to a 740, but I can't seem to get over this 700.  A lot of the debt is in my name, not his.  I have been reading so many posts and I am so confused where to go from here.  

 

I created a spreadsheet and I can see what percentages each credit card is at, what cards are costing me more per month, etc.  I have it all organized by statement closing date so I can focus the money each month to hit when the credit card company will report.  I am meticulous about keeping this spreadsheet updated, I just don't know what to focus on.

 

So, do I focus on the cards that have a high interest rate but with a lower balance, or the cards with the lower interest rate and higher balance? My utilization is at a 69% and it's killing me that my credit score hasn't moved.  I have one loan that hasn't refreshed in months and it is about $3000 less than what shows on experian- I need it to post!  Anyway- what is the best way to get my credit score to move?

 

1) Pay low balance but high interest?

2) Pay all cards to get below 50% utilization?

3) Pay card with the highest balance and lowest interest?

 

*I have 4, 30 day late payments that will be a year old at the end of October.  I have tried and sent lots and lots of letters - 2 were removed, 4 are still left.

***Goal to get to 740 so that we can refinance our mortgage at the best rate.  Our house is worth about $500k and we owe $210.  

Thank you!

Message 1 of 7
6 REPLIES 6
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Community Leader
Senior Contributor

Re: Where to go from here....

@spedteacher1 

 

Financially speaking it's always best to pay off the higher interest cards, then you can start snowballing the rest. Once your utilization goes down and you cross the thresholds your scores will improve.

 

Unfortunately those lates are still considered recent and will hold your scores down somewhat.

EXP 758 TU 783 EQ 729
Message 2 of 7
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Community Leader
Super Contributor

Re: Where to go from here....

Well if you provide us with a screenshot of your spreadsheet, perhaps we can give you specific pay down order options and you can decide for yourself what's best. As @Jnbmom pointed out, financially it makes more sense to pay higher interest cards first.

 

But if you're worried about scores, it's better to bring all cards over 50% util down to 50% or less, and bring as many down to zero as you can. That'll help your mortgage scores.


Last App: 8/24/2020
NFCU Secured Card

Currently rebuilding as of 04/11/2019.

Starting FICO 8 Scores:




Current FICO 8 scores:


Message 3 of 7
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Re: Where to go from here....

I thought the threshold was 69%...which I was pushing and pushing for.  Now I realize it is really 68.9%- I am at 69.3%.  I have another card that will update on the 20th, my card with the lowest balance but highest interest.  I just paid a bit more towards it.  When that updates that should cross me to under 69.3%...hopefully!

Message 4 of 7
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Frequent Contributor

Re: Where to go from here....

You have the advice above regarding utilization and best use of funds to reduce highest interest balances.

 

As it relates to 30 day lates, good will requests given that you have some success there can't hurt.

 

The sting of 30 day lates reduces signficantly when the date of each ages to 24 months.

 



Message 5 of 7
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Community Leader
Super Contributor

Re: Where to go from here....


@spedteacher1 wrote:

I thought the threshold was 69%...which I was pushing and pushing for.  Now I realize it is really 68.9%- I am at 69.3%.  I have another card that will update on the 20th, my card with the lowest balance but highest interest.  I just paid a bit more towards it.  When that updates that should cross me to under 69.3%...hopefully!


It is (well, 68.9% is) for FICO-scoring purposes, but generally on future credit apps, lenders don't like seeing cards above 50% util. It's just risky-looking to them.

 

As I offered before, if you want a specific pay-down plan, or plan(s), post your spreadsheet with all CCs/balances/interest rates/credit limits, and we can offer up advice on which ones to pay first for optimal scoring.


Last App: 8/24/2020
NFCU Secured Card

Currently rebuilding as of 04/11/2019.

Starting FICO 8 Scores:




Current FICO 8 scores:


Message 6 of 7
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Valued Contributor

Re: Where to go from here....


@spedteacher1 wrote:

I thought the threshold was 69%...which I was pushing and pushing for.  Now I realize it is really 68.9%- I am at 69.3%.  I have another card that will update on the 20th, my card with the lowest balance but highest interest.  I just paid a bit more towards it.  When that updates that should cross me to under 69.3%...hopefully!


It is 68.9%, but I have noticed the bureaus round up no matter if I have 68.9% or 68.1% util reporting to 69% (as they use whole % numbers and whole $ numbers), so I usually like to just say 68% so that 68% actually is reported for calculating scores.




Starting Score: 2•20 | EQ 550 | TU 498 | EX 505
Current Score: 10•20 | EQ [F8 615] [F9 653] [EQ5 645] [VS3 656] | TU [F8 567] [F9 552] [TU4 563] [VS3 639] | EX [F8 587] [F9 573] [EX2 614] [VS3 631]
Goal Score: 680


Take the myFICO Fitness Challenge

SO Starting Score: 2•20 | EQ 502 | TU 484 | EX 521
SO Current Score: 9•20 | EQ [F8 602] [F9 553] [EQ5 584] [VS3 531] | TU [F8 620] [F9 579] [TU4 570] [VS3 623] [VS4 634] | EX [F8 642] [F9 573] [EX2 621] [VS3 638]
Goal Score: 680


Take the myFICO Fitness Challenge



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