Where will my extra $146 give me the most bang for my buck?

[Anonymous]

My first post on MyFico, so hello everyone!

I returned a defective item and decided not to get a replacement. I now have $146 that is burning a hole in my pocket. 

I understand that ANY negative is bad. And that high CC utilization is also bad. But is there a "best" place to put that little bit of extra money that I don't usually have? 

(I have budgeted $250 per month to clear up all of this debt between now and Aug'18. Just wanting to "spend" this unexpected money where it will give me the most bang for my buck. 

Bad accounts:

IC Systems (Banfield Pet Hospital) $161 is 4 years old

Professional Bureau of Collections (Verizon) $143 is 5 years old

SW Credit (Peco) $216 is 5 years old

SW Credit (Comcast) $310 is 4 years old

Good accounts - all are over 5 years old, never late

Kohl's - limit 1,500 (owe 427)

CapOne - limit 750 (owe 700)

Walmart - limit 600 (owe 350)

So where would you put the $146, and why? 

Thanks.

[Anonymous]

Pay down Cap One as you're reporting maxed out utilization there. This will bring you down enough to return some FICO points lost

[Anonymous]

My instinct was to quickly pay the old Verizon collection, or to pay down the lowest CC.

What you point out makes perfect sense. Thanks for the insight, going to read your 11 Rules now!

[thornback]

I would put it towards bring down utilization.. specifically, towards CapOne since it's at 93.3% util.

Kohls is at 28.4% - which is high but under 30% at least; Wal-Mart is at 58.3% which is super high but not as high as CapOne. I would want to keep my bankcard lender (CapOne) as happy as possible..happy lender can lead to auto CLIs.

The $148 is only enough to pay off one collection (verizon) - unless you get a good settlement on the others - and even then, a paid collection won't help fico scores unless you can get it removed after payment. Paying down util seems to be the best bet.

Total Current util: 51.8%
Total After Pay down: 46.07%

You want to keep your total until under 30% at all times, if possible (8.9% or less is ideal though). Utilization accounts for 30% of your fico.

[Anonymous]

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@Anonymous wrote:
Pay down Cap One as you're reporting maxed out utilization there. This will bring you down enough to return some FICO points lost

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What ABCD says. He knows his stuff!

[Anonymous]

tmr, thank you for the detailed explanations. 

It seems "backwards" to not put it toward something old to get it cleared up, but I now have a better understanding of how my utilization is currently affecting me. I will focus on getting Capital One and Walmart under 30%, and then hit collections. It feels good to have a plan, thanks for your guidance!

[Anonymous]

ABCD, just finished reading your 11 Rules.

A great read! My favorite is #8 and the reference to can't afford $200 but can eat lunch at Panera.

A few years ago I started mealplanning from what we have on hand, and started keeping some premade meals in the freezer to avoid ordering takeout. I couldn't believe the money we suddenly "found". I also bought each of us a Wawa travel mug, and we perc our own coffee and fill our mugs before we head out. The only time our mugs see a Wawa is on Free Coffee Day. 

Thanks again, it was really good food for thought.