Next steps and score goals. Advice please

Anonymous · ‎10-17-2017

I have managed to raise my scores from 624 (July this year) to 644 current. Happy with the progress so far and just wanted some guidence in preperation for a home loan in 18-24 months.

Here is where I sit

Card Name(open date) Balance/Limit

Credit One(Aug '13) 760/2000

Credit One(July '16) 277/900

Les Schwab Tire Center(Nov '16) 200/1000(used to finance my tires and will be used to get the girlfriend tires next month so plan on 600/1000)

Capital One(Sept '16) 0/500(Paid off 100% last month)

Best Buy(Dec '16) 0/2500(This is my normal use card and I never exceed 300 a month and pay it off each month)

Discover(Sept '17) 0/1000(Just opened this month) No intent to use

Zales(Dec '16) 0/1000(will never use)

Finger Hut(June '15) 0/500(Will Never Use)

Smile Generation(March '17) 0/2500(Is a dental credit card and will use most likely this year for tooth extraction)

Jarids(Dec '16) 0/500(Will never use)

Kay Jewlers(May '17) 0/500(Will never use)

Blue Nile(Opened Oct '17) 6500/7000(Just purchased engagement ring today with this through blue nile)

Regular payments made and on time for all of the accounts past 12 months.

Here are my questions.

#1 Would you pay off Credit One(Aug '13) as fast as possible or do something like $150 a month? Both options are doable but what has the best long term results?

#2 The jewelry cards I never plan on using...zales, jarids, kay, etc......Just close them and take a small hit for my debt/credit ratio going up?

#3 For my Best Buy Card....is it best to carry over a balance every month? Like $40 or try and maintain a zero balance since it is my primary use card?

I do not intend on applying for any more credit unless I need to buy a car next year. If I do buy a car should I look at doing it ASAP then let me credit age or buy when needed?

Anything else I need to be doing? The only other things on my credit are my car loan and I financed a couch 12 months no interest.

Anonymous · ‎10-17-2017

Blue Nile reporting high utilization will tank your score.

Long term aim to have only one card reporting any balance and make that balance less than 8% but more than $0. Don't pay interest if you can avoid it. Let a small balance report on one card, pay to zero after reporting, then next cycle let a new small balance report on one card.

HeavenOhio · ‎10-17-2017

Congratulations on the engagement.

The general rule is not to apply for any new credit in the 12 months preceeding a mortgage.

As ABCD says, the maxed out Blue Nile card is going to have a major effect on your score for a while, but you have some time to work on that. (Anything over 88.9% utilization is considered maxed.)

Pay off Credit One and close them. They cost a lot of money, and they're a pain to manage. You have enough cards on your report that Credit One's presence doesn't help you anymore.

You don't say which Discover card you have, but check out its terms. You're likely getting a cashback match after the first year. If so, one option would be to shift some spending from the Best Buy card to Discover. Also, you may have 0% interest for a time. It might be an alternative for your girlfriend's tires.

Also, never pay interest on a credit card if you can help it. If you need to borrow money, check out a loan from a bank or credit union (not a consumer finance company). It's a much cheaper way to borrow, and it won't have the negative effect on your scores that credit card balances do.

Anonymous · ‎10-17-2017

OP, if I were you I'd close just about everything you have except Discover, Cap One and maybe the 1 or 2 store cards that you use the most. Not until you pay them off, though, as that would increase your aggregate utilization. As the others have already pointed out, getting that utilization down is Priority #1. Some will tell you to pay down your highest utilization card first, others will say your highest interest card first, some the lowest balance card first. I say don't overthink it and just pay off debt. Debt is debt and how you arrive at no debt 12 months from now or whenever you apply for your mortgage in the grand scheme of things doesn't matter much.

Work yourself out a plan on paper based on your income/expenses (how much you can throw at CC debt/mo) and see if within 12 months you can get to all cards with less than 29% utilization and aggregate utilization at less than 9%. If you can, you're in a great place. I'd also suggest when you're about 50% of the way into this process that you start requesting CLIs on any accounts that will potentially give you one without a HP. This could help you chip away at that utilization a little faster by raising total limits. I still maintain that you should close out the majority of your cards, though, once your goal(s) are reached [mortgage attained].

HeavenOhio · ‎10-17-2017

When the OP says that the Best Buy card is his "normal use" card, that makes me assume it's the Visa. That's worth keeping.

I'd dump Credit One as soon as they're paid off simply because they're Credit One. But I'd hang onto everything else until overall balances are low or paid off, then close any retail cards that aren't necessary.

Anonymous · ‎10-18-2017

I didn't even know that Best Buy had a card with a Visa logo that could be used elsewhere, but if so good catch on that. I agree that hanging on to that card could be beneficial.

Anonymous · ‎10-18-2017

Yea It is a Citi Visa Best Buy issues.

Long story short....cancel cards when you can maintain a 9% overall utilization.

Pay off the Capital one with 800 balance as soon as you can

Have the credit card report a very small balance monthy

Keep 2-3 of the best cards

Ask for CLI's when you can(best buy one just gave me a 1k increase 2 days ago so I will wait a bit on that one.)

Anonymous · ‎10-18-2017

Yes to all of the above, just make sure that none of the CLI requests will result in HPs. Most should let you know if they will be anything other than a SP, but always double check this first. You can ask the creditor prior to your request, or search this forum as the answer is on here somewhere no doubt.

SouthJamaica · ‎10-19-2017

@Anonymous wrote:
I have managed to raise my scores from 624 (July this year) to 644 current. Happy with the progress so far and just wanted some guidence in preperation for a home loan in 18-24 months.

Here is where I sit

Card Name(open date) Balance/Limit

Credit One(Aug '13) 760/2000
Credit One(July '16) 277/900
Les Schwab Tire Center(Nov '16)    200/1000(used to finance my tires and will be used to get the girlfriend tires next month so plan on 600/1000)
Capital One(Sept '16) 0/500(Paid off 100% last month)
Best Buy(Dec '16)    0/2500(This is my normal use card and I never exceed 300 a month and pay it off each month)
Discover(Sept '17)    0/1000(Just opened this month) No intent to use
Zales(Dec '16)    0/1000(will never use)
Finger Hut(June '15) 0/500(Will Never Use)
Smile Generation(March '17)    0/2500(Is a dental credit card and will use most likely this year for tooth extraction)
Jarids(Dec '16)    0/500(Will never use)
Kay Jewlers(May '17)    0/500(Will never use)
Blue Nile(Opened Oct '17) 6500/7000(Just purchased engagement ring today with this through blue nile)

Regular payments made and on time for all of the accounts past 12 months.

Here are my questions.

#1 Would you pay off Credit One(Aug '13) as fast as possible or do something like $150 a month? Both options are doable but what has the best long term results?
#2 The jewelry cards I never plan on using...zales, jarids, kay, etc......Just close them and take a small hit for my debt/credit ratio going up?
#3 For my Best Buy Card....is it best to carry over a balance every month? Like $40 or try and maintain a zero balance since it is my primary use card?

I do not intend on applying for any more credit unless I need to buy a car next year. If I do buy a car should I look at doing it ASAP then let me credit age or buy when needed?

Anything else I need to be doing? The only other things on my credit are my car loan and I financed a couch 12 months no interest.

1. Pay Credit One off as fast as possible. Then don't use it any more.

2. From a utililization and scoring perspective, the jewelry cards should be left alone. But some loan officers might look askance at them so closing them wouldn't be a tragedy.

3. No there's no advantage to carrying a balance.

4. I don't see any point in saddling yourself with a car loan before applying for a mortgage. When you go into the mortgage application process you're going to want your installment utililzation to be 9% or lower.