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Good score but high ratios. What to do?


mynah
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I've got pretty decent credit as far as history. No late payments anywhere, and only one CA -- I disputed it and had it removed from 2/3 bureaus, and it will fall off next year. I have a mortgage (5 years) and a car loan (1 year). My car financing was 0% because I had a 700+ score.

I have nine cards open: Citibank ($3350 limit), USBank ($1800), Home Depot ($1000), Lowes ($1000), Kays ($3000), Amazon Store ($900), Amazon Visa ($800), and two Capital One ($500 & 550). The two Capital One and the Lowes currently have a 0% balance, and I've never used the Kays (I only got it to have a better ratio) but I'm carrying a decent balance on all the others (~80%). I went to apply for a miles card a few weeks ago, and I was denied. So, now I realize I need to pay my cards down/off.

I can use my home equity loan to pay them down and intended to do that on the Citibank since it went up to almost 30%. Note: I can financially afford to pay them all off over a few months; I just use them frequently and get lazy about paying them down more.

1) How much should I have on each card? Should I carry a balance at all or should I just pay them off completely?

2) How long until after I've done so can I successfully apply for another card like a miles card?

3) Should I close a few cards after I pay them off (not my longest one) or will it negatively affect my score?

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NEVER use a secured loan to pay off unsecured debt.

If you've got the money to pay them all off over a few months, do it.

Pay them to $0.

Keep Citibank ($3350 limit), USBank ($1800), Home Depot ($1000), Lowes ($1000),

Close Kays ($3000), Amazon Store ($900), Amazon Visa ($800), and two Capital One ($500 & 550).

Having "utilization" on your sucker score will only get you more CCs...you don't need them.

Read my signature.

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Don not use your home to pay off credit card debt.

A home equity loan has a 10 year draw period, then it turns into a fixed ammortized loan. Plus housing values continue to decline and the bank has the ability to cut your equity line as they do account reviews if you end up too far under water with your housing value. Then they will turn around and ask for an immediate payment.

I would find cards where you can do a 0% balance rollovers, yes they will probably charge you 2-3% of the principal amount to do so and pay as much as you can for the 6-12 months you have the 0% financing. You do not have a tremendous amount of credit card debt, so getting it put by 25%-50% in the next year if you maintain your current payments should not be unreasonable.

Or you can call these companies and try to settle the accounts out for 50% of the balance, if you have the savings to do so. The offset to that is your credit will take a hit showing paid in less than full.

The third option you have is some banks offer an unsecured consolidation loan, where you can consolidate every card balance into one. Most of those credit lines are between 8-10% over a 3-5 year time span.

Just do not use your house...

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Ok, thanks for the advice! I've got savings I could use, too. I never really think much about touching it (unless I end up in a situation where I needed to pay everything off at once). I'm not in a mess or anything; I just decided I'd rather get a miles card and start using that for the bulk of my spending rather than the rewards (and no rewards) cards I already have and would like to know how to best accomplish that. I want to get into a position where I'm eligible for the best card/rate possible instead of just applying for some now and getting whatever I can.

I'd rather not kill the Amazon cards, as I use them on the site a few times a month and get savings or specials by using them on things I would already be buying.

I've wondered about the Capital One cards. I've had them both over ten years. I know they don't have very high limits, but would it be a problem to close something so old?

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Also with the reward points cards, they are all going away eventually due to new banking regulations...so do not count on rewards points for too much longer....keep the Cap One cards open due to the length you have had them...closing them will slightly hurt your score..when you close older accounts in good standing..

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keep the Cap One cards open due to the length you have had them...closing them will slightly hurt your score..when you close older accounts in good standing..
Sorry, I disagree. Crap 1 is a bottom feeder. They offer multiple low limit cards to the same person knowing that sooner or later you'll go over your limit.

Close them. "History" really only matters with high end cards.

The impact on your sucker score will be minimal...in fact it may even improve, since having "bottom feeder" accounts on your CRs alerts the better cards that, at some point in time, your scores were lower and you took what you could get.

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So credit companies look down at some brands of cards on your account, even if they're in good standing with no balance? I didn't know that. Can you tell me what other cards are viewed upon negatively other than the Capital One? Will having a Capital One card in my history keep another creditor from extending to me?

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If the Crap 1's are closed, they shouldn't hurt. Creditors do look at who else you do business with...but, with so many mergers and buyouts going on, its tough to point out the ones to stay away from. Orchard was questionable...they were really owned by HSBC...but I've heard that HSBC is getting out off the business.

AMEX is probably still the gold standard...then any old the big banks...BofA, Wells Fargo, etc.

Store cards are almost always actually a bank card (like Citi) rebranded.

A closed Crap 1 will get better with age.

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