Prioritizing for fastest FICO increase

Anonymous · ‎11-17-2015

Knowing that high utilization or a collection account can and do affect your FICO, if you had 50% utilization on your credit cards and a medical collection for which you are sure would be deleted with a pay for delete, which do you feel would best to prioritize in order to yield the quickest boost to your FICO? Say, over the next 3-4 months, you could either focus on lowering your utilization to 9%, or you could focus on paying that collection and getting it deleted while making a bit more than minimum monthly credit card payments.

Thomas_Thumb · ‎11-17-2015

The collection has a much greater impact on score. I would 1st pay to delete the collection.

A greater than 50% aggregate utilization is high. Getting it below 30% should add significant points to your score. Going from under 30% to under 9% likely will have a lesser impact on score.

Fico 9: .......EQ 850 TU 850 EX 850
Fico 8: .......EQ 850 TU 850 EX 850
Fico 4 .....:. EQ 809 TU 823 EX 830 EX Fico 98: 842
Fico 8 BC:. EQ 892 TU 900 EX 900
Fico 8 AU:. EQ 887 TU 897 EX 899
Fico 4 BC:. EQ 826 TU 858, EX Fico 98 BC: 870
Fico 4 AU:. EQ 831 TU 872, EX Fico 98 AU: 861
VS 3.0:...... EQ 835 TU 835 EX 835
CBIS: ........EQ LN Auto 940 EQ LN Home 870 TU Auto 902 TU Home 950

Anonymous · ‎11-17-2015

My feeling is that CC debt can always be paid down. The opportunity to do so will never go away. But a "pay for delete" is not always available to anyone, so my own bias would be to get that taken care of while you can.

There are still other factors to consider of course. For example, if you also felt fairly confident that you would not be sued for the medical debt (prior to the SOL) and the cost of it was quite high, then it might make more sense to just abandon the debt and let it stay on your report until it dropped off at 7 years.

As you can see, there are pros and cons to anything, but based on what you have told us my bias is toward removing negatives (assuming you have a long time before the 7 year mark and it isn't a huge amount) and then after the PFD you can turn to your CC debt.

PS. If you think you might be able to do both at the same time, you might find some benefit from going from a utilization of 51% to just under 49%, focusing your extra money on any cards that are the closest to being maxxed out.

Anonymous · ‎11-17-2015

I appreciate the responses greatly. the medical collection is a bit over $900. Pretty sure in a month and a half I can accumulate that much. I've seen several BBB reviews etc of the CA in question and it appears they have been very agreeable to pay for deletes. Ive had a couple of other collection accounts with them about 13 years ago. Without getting into all of the details etc, they never contacted me by phone or by mail. Never any threats of lawsuits etc.

Anonymous · ‎11-17-2015

How old is the medical debt?

Anonymous · ‎11-17-2015

@Anonymous wrote:
How old is the medical debt?

Right at two years. I'm in Texas. Can't remember SOL offhand, but 4 years I think.

jamie123 · ‎11-17-2015

Having a collection removed from your reports can be worth a ton of points. In my wife's case, a collection aged off her reports which left her with clean reports. Her scores went up more than 90 points!

You won't get anywhere that kind of movement with UTI.

Starting Score: EQ 653 6/21/12
Current Score: EQ 817 3/10/20 - EX 820 3/13/20 - TU 825 3/03/20

Anonymous · ‎11-17-2015

So you know all the pros and cons. You can make the best call.

If you contact a collection agency that has ignored you for years, it's conceivable that this could be perceived as a customer who is desparate to pay, which reduces your negotiating power. On the other hand, you have done your homework and research on this CA and you feel that you could definitely get them to do a PFD. (Con vs. Pro)

You can decide whether waiting for five years for it to fall off is worth it to you. Sounds like the amount is small enough to be not, but again you know what that time is worth. (Another Con vs. Pro)

Good luck and you will definitely do what is right for you. Personally I like the way you are leaning.

Anonymous · ‎11-17-2015

@Anonymous wrote:
So you know all the pros and cons. You can make the best call.

If you contact a collection agency that has ignored you for years, it's conceivable that this could be perceived as a customer who is desparate to pay, which reduces your negotiating power. On the other hand, you have done your homework and research on this CA and you feel that you could definitely get them to do a PFD. (Con vs. Pro)

You can decide whether waiting for five years for it to fall off is worth it to you. Sounds like the amount is small enough to be not, but again you know what that time is worth. (Another Con vs. Pro)

Good luck and you will definitely do what is right for you. Personally I like the way you are leaning.

My TU and EX scores are 650, EQ is 620. If I thought getting Utilization down to the known happy point for best FICO, could get me to 700 on all three CRs, I'd probably lean towards focusing on my utilization and just watching that negative age. I'm just unsure if that strategy would work to get those scores to 700. Of course I want my scores to ultimately be as high as possible, but I'd be thrilled with 700s.

Anonymous · ‎11-17-2015

The medical debt seems small compared to how fast you can save. I think your plan is great.

Is the medical debt your only negative?