How should I pay my credit card debt?

[Anonymous]

I'm new to the group and have been following the forums for almost four years for tips and tricks for my credit score.

I have 100% of on-time payments and two collections of $400 and $1,064 that have been paid off in December but still show on report. I have no other bads but my credit card utilization is showing as a high impact on my score.

What would be the best way to use $6,500 now to improve my utilization and score the fastest?

Below is my credit card debt:

Capital One QS 2338.84/2500

Capital One Platinum 270.01/300

Capital One 2993/3500

Chase Freedom Unlim. 3106/3200

Barclay Cash Forward 840.64/900

Samsung 1062.44/2200

Walmart 964.64/1100

My cards with no balance:

Barclay 0/5000

Cap One 0/5000

Lowes 0/500

Barclays 0/6700

Home Depot 0/500

Thank you so much!

[Anonymous]

It really depends on if your goal is score improvement or less interest paid. If it's score improvement, use your $6500 to pay off as many accounts as possible, meaning start with the ones with the lowest balances. If you're looking to save money on interest, start with the highest interest rate accounts first.

[Anonymous]

My goal is to raise my score. I don't mind interest right now because I will pay off all credit card debt in November.

So I should eliminate smaller balances to accomplish this?

Or would eliminating the smallest debt then lowering each balance to 25% be best?

[Anonymous]

Others can chime in on bringing certain accounts down to below specific thresholds with respect to score impact.  With your 7 accounts currently with balances, it looks like you could take 5 of them down to $0 with $6500 with a little left over to put toward the remaining 2.  That would make me feel pretty good about my debt and then I'd just be focusing on 2 bills to put good sized payments toward monthly going forward, which is pretty simple to manage.

[Anonymous]

---

@Anonymouswrote:
My goal is to raise my score. I don't mind interest right now because I will pay off all credit card debt in November.

So I should eliminate smaller balances to accomplish this?

Or would eliminating the smallest debt then lowering each balance to 25% be best?

---

No matter which strategy you use your score will end up at the same place in November (when your CC debt is paid off).  Is there some particular need for credit that you will have between now and November?  For example, buying a car during the summer?  If not, I would consider re-thinking your priorities: there's no need to concern yourself with how fast the score improves but it is always a good idea to save money.

PS.  Can you tell us more what you mean when you say "I have 100% of on-time payments and two collections of $400 and $1,064...."?  That doesn't sound right.  If you have always made payments on time then you wouldn't have two collections.

[Anonymous]

That's what I am going to do.

Thank you!

[SouthJamaica]

---

@Anonymouswrote:

I'm new to the group and have been following the forums for almost four years for tips and tricks for my credit score.

I have 100% of on-time payments and two collections of $400 and $1,064 that have been paid off in December but still show on report. I have no other bads but my credit card utilization is showing as a high impact on my score.

What would be the best way to use $6,500 now to improve my utilization and score the fastest?

Below is my credit card debt:

Capital One QS 2338.84/2500

Capital One Platinum 270.01/300

Capital One 2993/3500

Chase Freedom Unlim. 3106/3200

Barclay Cash Forward 840.64/900

Samsung 1062.44/2200

Walmart 964.64/1100

My cards with no balance:

Barclay 0/5000

Cap One 0/5000

Lowes 0/500

Barclays 0/6700

Home Depot 0/500

Thank you so much!

---

270.01   Cap One Platinum

964.64   Walmart

840.64    Barclay Cash Forward

1638.84  Cap One QS

2013      Othe Cap One

772.87   Chase Freedom

[Anonymous]

The reason for wanting the score increase is because I am wanting to purchase a car in the summer. It's not a necessity as I have a 2014 Ford F350 Powerstroke and a 2006 Acura TL both paid in full. I just have my eye on a vehicle and would like it but I can wait.
 
The reasoning for the collections is I was on a joint account with my ex and she failed to pay a debt to the hospital ($1,064) and a clinic ($400) when our kids were sick. I ended up getting served to court by a collection agency in our town and had no idea about the debt. I just went ahead and paid it instead of fighting that I never authorized or added myself to the account.
 
 

wrote:


wrote:
My goal is to raise my score. I don't mind interest right now because I will pay off all credit card debt in November.

So I should eliminate smaller balances to accomplish this?

Or would eliminating the smallest debt then lowering each balance to 25% be best?

No matter which strategy you use your score will end up at the same place in November (when your CC debt is paid off).  Is there some particular need for credit that you will have between now and November?  For example, buying a car during the summer?  If not, I would consider re-thinking your priorities: there's no need to concern yourself with how fast the score improves but it is always a good idea to save money.
 
PS.  Can you tell us more what you mean when you say "I have 100% of on-time payments and two collections of $400 and $1,064...."?  That doesn't sound right.  If you have always made payments on time then you wouldn't have two collections.

 

[Anonymous]

---

@AnonymousThe reasoning for the collections is I was on a joint account with my ex and she failed to pay a debt to the hospital ($1,064) and a clinic ($400) when our kids were sick. I ended up getting served to court by a collection agency in our town and had no idea about the debt. I just went ahead and paid it instead of fighting that I never authorized or added myself to the account.

---

Are those your only 2 negative pieces of information on your credit report?  If so, I would strongly advise you to do whatever you can to get those collections removed.  They're paid, which is a good look.  I'd explain that you didn't know about those debts and that if you did you would have taken care of them promptly, as you did when you became aware of them.  It may take a little persistence, but if you were to get those collections removed your score would increase something to the tune of 60-80 points.  That's probably right around what your scores would go up from paying down your utilization completely, except in the case of the collection removal it obviously doesn't cost you ~$12k or whatever your revolving debt is.  Just something to consider since your goal is score improvement.