How to protect score from potential balance chasing?

[Anonymous]

Hi,

i've been working on rebuilding my credit the last year and a half. I've always had a decent score because I never missed a payment but the last couple years carried high balances and mixed out cards (80-90% utilization) When covid hit I entered hardship payment programs with target redcard, Amex everyday , and discover to lower some monthly payments and take control of my credit. Discover was 6 month program, ended around august 2020. Amex ended jan 2021 and target hardship ended feb 2021.  

fast foward to now, fico score from discover says 644 (shows 63% utilization) and Experian from Experian shows 676 credit score  (73% utilization) which I'm proud of because the hardship programs lowered my score significantly initially so my scores have come a long way and are in a decent space IMO. 

while getting my credit under control I was paying heavy on my chase southwest card because of the high APR. my limit was 3.7K but after several months of large payments they cut it to 2K. Worried of getting balance chased i decided to only make minimum payments to them and will begin making larger payments to get on my Amex everyday balance down (high APR also). 

today after my target statement closed I went to see my new min payment after it being the same for a year since I was on a payment plan and I noticed my limit went from 4.3K to 2.6K. Only leaving me $60 available. When I had about 1.5K avalaible before 

im moving to a new apartment on my Own no roommates for the first time ever in July. I'm worried if I start/continue getting  balance chased on multiple cards my UT will get super high again,  impacting my Score, impacting the apartments I can get. Any advice to combat this? Should I even be worrying? It's just really disheartening. I'm in my older 20s, trying to really get a handle on my credit, it's getting to manageable place and I don't want to be as reliable on credit as I was in my early 20s ever again but I also want a strong credit profile and score. aside form the hardship programs I entered no baddies or dings on my profile. 

below are my current cards and limits if  it's helpful 

Amex everyday: $2460/3K limit 

Braclays card: $0/1.2K limit 

Cap1: $2860/$3300K limit 

Citi: $1651/2K limit 

Citi: $2437/2800K

Discover: $5491/$6700 limit 

Chase: $1966/$2400 limit 

Chase: $2852/$3500 limit 

Macy's: $0/3K limit 

Care credit: $744/$4500 limit

Gap: $0/$760 limit

Target: $2839/$2900 limit  

[Anonymous]

To get your scores up you need to get your utilization down.  Presently you're at 64% overall utilization.  You should shoot for getting that under 30% to get a score boost.

Of course, that means you need to hunker down and start paying down those debts.  There's two common ways: the snowball and the avalanche method.

Snowball: you start with the smallest balance and pay that down first, while making minimum payments on the rest.  Once the lowest balance is paid off, you move on to the next lowest balance, and so on.  This gives the quickest gratification because you'll zero out each card quicker, at first at least, and as you pay each off, you'll have more to put toward the next one.

Avalanche is similar, except you start with the highest APR card first, and work your way down.  This method saves more in interest, and would get your debt paid off faster in the end, but you sound like you're more interested in FICO scores, so I think snowball is better in your case.  Once you get to over 50% of your cards having a zero balance, you should see a score boost as well.

If you go the snowball route, start with the Care Credit first and get that paid off.  Then the Citi, and so forth.  BUT: if you're being balance chased, you'll want to concentrate on cards that are NOT balance chasing you first, since that will help with your utilization.  Some of your maxed out cards may start balance chasing as you pay them down; if that happens, switch to paying down another card until you find one that isn't balance chasing you.  Pay off the chasing ones last.

Another option which will help your scores more quickly would be to take the cards with the highest utilization and pay those down first.  Your Target card would be the first... ahem... target, in that case, except they're balance chasing you, so wait on that one.  Do the Cap1 card next.

Regardless of the approach you take, avoid putting more charges on your cards if you can.  You need to pay off your debts, not run them up again!  See if you can get a boost in income by taking a 2nd job, doing odd jobs, or cut unneeded expenses (cable/satellite, eating out, streaming are often things that can be cut).

[blindambition]

You want to hit next threshold of 48.9%, since aggregate utilization is currently sitting at 64%. Your ideal goal is to be below 28.9%.

As for balance chasing, one of your lenders can choose that anytime, no controlling that. Your focus is to get those balances paid as quickly as possible. Finances before scores. Good luck!!

[M_Smart007]

Great advice upthread.

You may want to spend a little time reading this;

https://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/General-Scoring-Primer-and-Version-8-Mas...

[thornback]

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@Anonymous wrote:

im moving to a new apartment on my Own no roommates for the first time ever in July.

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Hi and welcome to the forums. 

Unfortunately, there's nothing you can do about balance chasing - nor the temporary affect it will have on your utilization and thus, scores.  All you can do is pay your balances as quickly as possible so util won't be an issue regardless of limits, and keep making payments on-time so you have no long term negative effects. You can always re-grow your limits down the road. 

Great advice on the best paydown methods given by @Anonymous  above.

My concern is your moving into your very own place for the first time ever and being soley responsible for all costs associated with apartment living, in addition to your cc debt.

Is July set in stone or is it possible to delay the move until you finish paying off your debt ?  If the option exists, I would strongly recommend waiting to move until you're debt free on your credit cards because rent and utility payments (and food) will need to be priority- which may cause you to make some tough either/or choices when it comes to your cc debt which may result in late payments or worse. 

If you cannot delay the move, then try to pay this debt down as much as possible before moving by cutting spend wherever possible and throwing every available dollar to it. 

I wish you the best.

[Anonymous]

Thanks for the advice! Yea the move is happening in July, that's when my current lease is up. That's why I'm concerned about my credit score, I want to make sure it's good enough to get approved for a new apartment.  my budget currently includes rent, utilities, etc, but I am expecting a rent increase of about $400 when I move, which means I'll have less money to aggressively pay down debt with. I am managing to save money each month too. 

I'm currently working on the avalanche method. Starting with Amex everyday since it's my highest apr, fingers crosssd they don't balance chase me. I'm hoping to have that close to paid off by the time I move. 

[Anonymous]

Thanks for the advance! It's nice to know the next threshold is 48.9%. Hopefully I can get there soon. 
 Thank you! 

[Anonymous]

I already work two jobs. A full-time job and a consistent freelance gig.  both remote at the moment but thinking of a part-time weekend retail gig. Use the extra money to pay down on some debt. 

I like your idea of paying the cards with the highest utalization. The cap1 card is not my card with the highest APR but it's still up there so i think I'm gonna go that route.

thanks!