From 730 to 630 in 6 months

[Anonymous]

Hey guys. First post here. Trying to figure out how to right the sinking ship that is my credit. At the beginning of this year we totaled my wife's car. Insurance paid off the loan and we bought another car for her in January. At the time my score was 730. Upon the first loan closing my score dropped 20 points to 710. In March I opened an account with Cornwell tools since I bought a new tool box. (I'm a diesel mechanic for caterpillar) my score dropped to 690. In the beginning of July I bought a new to me truck since my old beater was falling apart and getting more expensive monthly than what a truck payment would cost me. Since the truck was used I bought new tires for it on a les schwab account in the end of July. I was unaware that les schwab credit shows up as a maxed out credit card on your credit score. I needed to finance 2000 so they made that my limit and now I have a maxed out "credit card" against me. My credit score as of today is 630. In total I have 5 accounts on my credit. My truck, wife's car, Cornwell, les schwab, and one credit card through a local credit union. The limit on that card is only $500. I got the card when I tuned 18 4 years ago and only use it for paying utilities and pay it off every month. I was looking to get a new credit card to pay off the les schwab since they don't do credit increases but I've gotten denied or offered a $300 limit on everything I've tried. My income is around $60k before overtime. Wife works for the school district and makes about $30k. We like to keep our finances separate unless it's a car loan or something big. She pays for her car I pay for mine but we're both on both loans. I was thinking if I could get a credit card for say $3500 and pay off the schwab account with it I could get rid of the 98% credit utilization that my credit shows and get things turned around but it doesn't look like it's possible. I want to get serious about building a house next year so I would like to get this worked out now. If there is any other info you guys need please let me know. Looking for suggestions here. I know most of you will say "pay off schwab" but $2000 is a hard hit all at once. Thanks in advance. 
Hunter

[Anonymous]

I'd advise patience and time. When will you pay off the $2000? As you pay it off, the utilization will recover. If you're not looking to build the house, this year, I'd give it to the end of the year or early next year to pay down the $2000 and in the ensuing months, your credit score will reocover. Is it possible to get a soft pull cli for your card? I'd wait to do that until some of the $2000 is paid off as well. As soon as you're under 30% utilization on that $2000, then I'd advise trying your luck again with cards. Also, check with your credit union to see if you can get a loan to pay off that $2000, so then it's not an issue of utilization. 

[Anonymous]

Thanks for the reply Dommie. My goal was to pay off the $2000 by the end of the year. Want to look into building the house next summer. Unfortunately my CU makes me submit a new credit card app if I want a CLI for my current card. That's why I thought I would be better off getting a new card to wipe it out. I may look into getting a personal loan from my CU if it comes down to it. I'm going to pay $500 on the credit line this month and see how it goes. When that Les Schwab account opened my credit dropped from 670 to 630. Kinda freaked me out lol. 
Thanks again. 
Hunter

[Anonymous]

Believe me, I've been freaked out, too. lol But it sounds like you'll see recovery by the end of the year and can then apply for another card worth having. Hope the personal loan with your CU ends up being a possibility. Good luck with it and the house. 

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@Anonymous wrote:

Thanks for the reply Dommie. My goal was to pay off the $2000 by the end of the year. Want to look into building the house next summer. Unfortunately my CU makes me submit a new credit card app if I want a CLI for my current card. That's why I thought I would be better off getting a new card to wipe it out. I may look into getting a personal loan from my CU if it comes down to it. I'm going to pay $500 on the credit line this month and see how it goes. When that Les Schwab account opened my credit dropped from 670 to 630. Kinda freaked me out lol. 
Thanks again. 
Hunter

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[CH-7-Mission-Accomplished]

I get that you and your wife like to keep your finances separate except for big things like a car or a house, but I have a question:   What are her actual FICO scores like, both version 8 and version 9?  

If her scores are higher than yours, she could get a credit union card with a low interest rate or get a card with a lengthy 0% interest period.   Discover used to offer this kind of deal.   She could add you as an authorized user or else just pay off Les Schwab.   For you guys this 2K is a big deal so it might be worth making an exception to your policy.    Once the 2K is off your reports (assuming she does not make you an AU), you could then wait a month or two for your scores to jump back up, go get a credit union card with a decent limit and then balance transfer back to pay off her card.   You could also get a personal loan from a credit union.   But if her scores are in the low 600s or lower this wouldn't work because she would not likely get approved for something big enough to pay off the 2K.   And as you know, you don't want a 2K limit to pay off a 2K debt.   Ideally a limit of 5K to 10K is best.

Just a suggestion for one way to tackle this.   Otherwise just keep paying down Les Schwab.   Once you owe less than 90% of the credit limit (so less than $1800) you will gain back points since the card won't be "maxed out" any longer for FICO scoring purposes.

[GatorGuy]

I would strongly urge you to focus on your finances before your credit score. If you are having to finance tires and a tool box then focus on getting a more solid financial footing. Get that debt paid off. Then save an emergency fund. Then focus on saving for a down payment for a house. 

Paying that debt off and letting accounts age will actually improve your credit situation.

I also agree with the above poster about talking to your wife about using both of your full financial and credit resources together. You are much stronger off working together as a team. Also if she is willing to combine credit for cars and houses, those are the biggest things so it shouldn't be as big of deal for credit cards, etc.