Long Journey with a few questions remaining

[Anonymous]

Very long story- but 10 years ago I was bleeding money and deeply in debt. I had almost zero $ left after punishing interest rates and minimum payments. I know it was my fault, but things had just snowballed, and I was forced to declare bankruptcy. In the interim, I opened up 6 low level cc's to rebuild. Have 100% on time payments, and bankuptcy recently fell off!! (2 months early on experian, and one month on equifax and transunion!!) Experian is reporting at 685. I plan on lowering my overall utilization next month to about 20%. My question is that I want to get rid of my **bleep**ty Merrick and Mercury rebuild cards. Hoping to get my score up to 750 and pply for Saphire big boy card! Bad idea?..or should I just keep them?

Thanks

[HeavenOhio]

Welcome, @Anonymous.

Definitely lower your utilization. 685 is a low score for a clean report.

Could you list your cards, their limits, the month/year they were opened (or their ages in months)? That information would help us a lot in determining what your next step might be.

[Anonymous]

OP, pay off all your cards and keep them paid off for a while.  It's concerning to hear that you're still at high utilization after having gone through a BK; this to me suggests that you may not have completely learned your lesson yet.  Thinking about acquiring a "big boy" card should be the last thing on your mind right now, IMO. 

HO is right that for a clean report, your scores are low.  You should be in the mid-700's easy, maybe higher depending on your age of accounts factors.

[RonM21]

Op, congrats on your journey from having the BK on your reports. Both comments above mine are useful in that I think lowering your utilization is a good place to start. But also, you want to look at what has your utilization higher to begin with and try to come up with a way to manage that. You want to build on what you have accomplished, but slow and steady is the way to go there. Then, once you have gotten your utilization down, you can revisit where you are at in relation to getting another card.

[SouthJamaica]

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@Anonymous wrote:

Very long story- but 10 years ago I was bleeding money and deeply in debt. I had almost zero $ left after punishing interest rates and minimum payments. I know it was my fault, but things had just snowballed, and I was forced to declare bankruptcy. In the interim, I opened up 6 low level cc's to rebuild. Have 100% on time payments, and bankuptcy recently fell off!! (2 months early on experian, and one month on equifax and transunion!!) Experian is reporting at 685. I plan on lowering my overall utilization next month to about 20%. My question is that I want to get rid of my **bleep**ty Merrick and Mercury rebuild cards. Hoping to get my score up to 750 and pply for Saphire big boy card! Bad idea?..or should I just keep them?

Thanks

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My advice would be:

1. Yes get rid of those cards if they have annual fees. Otherwise hold on to them for now and wait until your overall utilization is 9% or lower.

2. Since you're interested in Chase Sapphire cards, don't apply for any other new cards at all. Chase is a jealous mistress.

3. Once you're at 9%, come back to us with a list of what cards you have, the balances and limits, when you got them, and what your FICO scores are, and we can give you a recommendation as to whether you're ready for Sapphire or not.

[Anonymous]

Thank you all for your replies!! I appreciate the wisdom. I checked my scores last week on the Experian site and they showed 698 on equifax, and 692 on Transunion (interestingly they show much lower on my weekly "fako" updates provided by my credit cards. Another thread topic?!) Anyway, I certainly learned my lesson over the course of the last 10 years. I have many of the same issues that I had a decade ago, but have learned to manage them much better. I'm 53 with a $130,000 annual income which sounds ok, but still gets eaten up by daily life expenses, living in an expensive city, and kid's tuition (the biggest $$ suck!) I don't live off debt, or spend beyond my means. I'm at $12,500 total debt at 75% utilization. I have no new cards and one inquiry in last 2 years. Since BK fell off, no lates or derogs. I have no stains on my report other than utilization. I plan on paying about $10- 11,000 down next month with bonus $$. The average age of my open accts is 6.5 years. I want a better card for rewards, not to go into greater debt!! It has been a long slog to get the point of no negatives on my report, which I'm proud of and vigilant to NEVER repeat!!

Again thank y'all!!

[NRB525]

OP congrats on your progress  

You mention you have a lot of low limit cards.  Can you list them out, which bank, card brand, limit and current balance? 

The plan to pay them down significantly is good news.  Finding ways to improve the cards you have will help your scores as well.  

After the pay down, that is probably the time to consider closing the two cards. Right now you are very close on utilization so it would hurt to close them too soon.  

[Anonymous]

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@Anonymous wrote:

I'm at $12,500 total debt at 75% utilization. I have no new cards and one inquiry in last 2 years. Since BK fell off, no lates or derogs. I have no stains on my report other than utilization. I plan on paying about $10- 11,000 down next month with bonus $$. The average age of my open accts is 6.5 years. I want a better card for rewards, not to go into greater debt!!!

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I still think you need to reevaluate your current situation and your goals here.  You're at 75% utilization post-BK.  That's not a good thing and IMO you should be concerned with that, regardless of your income.  You cited heavy expenses relative to your income, which seems to be the case if you're at 75% utilization.  I have no idea what your interest rates are, but on $12,500 in debt you'd pay far more in interest over the course of a year than you'd ever make back with a better rewards card.  To give it some perspective, you'd have to spend close to your salary of $130,000 on a 2% CB credit card to get back in rewards what you'd pay in interest on that amount of debt.  Again, my advice here would be to rethink what's important here.  Taking your utilization down to an ideal place (say, a single-digit number) and keep it there indirectly will pay you far more "rewards" than a rewards card ever could.

[NRB525]

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@Anonymous wrote:

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@Anonymous wrote:

I'm at $12,500 total debt at 75% utilization. I have no new cards and one inquiry in last 2 years. Since BK fell off, no lates or derogs. I have no stains on my report other than utilization. I plan on paying about $10- 11,000 down next month with bonus $$. The average age of my open accts is 6.5 years. I want a better card for rewards, not to go into greater debt!!!

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I still think you need to reevaluate your current situation and your goals here.  You're at 75% utilization post-BK.  That's not a good thing and IMO you should be concerned with that, regardless of your income.  You cited heavy expenses relative to your income, which seems to be the case if you're at 75% utilization.  I have no idea what your interest rates are, but on $12,500 in debt you'd pay far more in interest over the course of a year than you'd ever make back with a better rewards card.  To give it some perspective, you'd have to spend close to your salary of $130,000 on a 2% CB credit card to get back in rewards what you'd pay in interest on that amount of debt.  Again, my advice here would be to rethink what's important here.  Taking your utilization down to an ideal place (say, a single-digit number) and keep it there indirectly will pay you far more "rewards" than a rewards card ever could.

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OP has about $16,500 total credit limits, on smaller limit cards. The 75% utilization is due to come down soon with the bonus funds. In order to get to a low single digit on regular spend flow, OP needs higher limits. 

I agree OP should try to get to PIF on all cards, that seems to be getting more realistic.  At this point we don’t know he interest rates OP is paying on carried balances, but it is likely substantial, could be $200 per month.  

[Anonymous]

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@NRB525 wrote:

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The 75% utilization is due to come down soon with the bonus funds. 

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Which further punctuates my point.  That to me says that if the bonus funds weren't available, the OP would continue to roll with 5-figure revolving debt.  Bonuses under most circumstances aren't gauranteed and shouldn't be relied on for paying off debt.  Sure, this may get the OP out of this situation this time, but what about moving forward?  Again the root cause and underlying issue here IMO is arriving at 5-figure revolving debt post-BK.  To me, this is the most important theme to address.