topic Re: How maxed out cards affect your FICO in General Credit Topics

How maxed out cards affect your FICO

Brammy — Thu, 05 Apr 2007 18:26:39 GMT

I have one card that was reporting maxed out due to not reporting a credit limit. My overall utilization was still standig at 34%. This card just updated today to show a 0 balance. Resulted in a 15 point bump in score. In a system where a few points can, make a difference between whether or not you can afford a house, this was HUGE. Lesson learned, never max out a card, or if you do, pay it off before the statement date.:smileyvery-happy:

Message Edited by Brammy on 04-05-2007 02:26 PM

Do you use score monitoring program on this site? I signe...

yoreljm — Thu, 05 Apr 2007 22:34:36 GMT

Do you use score monitoring program on this site? I signed up for the free trial, but it has never notified me of a credit score change...and I'm pretty sure my score must have changed.

Congratulations Brammy I would have to also say that I pa...

jaybee — Thu, 05 Apr 2007 23:04:03 GMT

Congratulations Brammy

I would have to also say that I paid two of my credit cards down and they are both under 20% now and a week later I received a nice little notification saying that my score went up 17 points YAAAYY!!!!

Re: Congratulations Brammy and Jayee I would have to also say that I pa...

antredd67 — Thu, 12 Apr 2007 20:52:25 GMT

I would have to say that we are well on our way to getting in the 700 club. I just realized that when we apply for credit unless it's a mortgage, credit companies only pull one credit report from either Experian, Transunion, or Equifax. When Wamu pulled my credit report, they pulled it from my Experian which is my highest Fico score right now. So it's sorta good to know which report the credit card will pull from as to minimize the number of inquiries..

Re: Congratulations Brammy and Jayee I would have to also say that I pa...

Brammy — Thu, 12 Apr 2007 21:06:11 GMT

antredd67 wrote:
I would have to say that we are well on our way to getting in the 700 club. I just realized that when we apply for credit unless it's a mortgage, credit companies only pull one credit report from either Experian, Transunion, or Equifax. When Wamu pulled my credit report, they pulled it from my Experian which is my highest Fico score right now. So it's sorta good to know which report the credit card will pull from as to minimize the number of inquiries..

Thanks beware Crapital one always pulls one of EACH

Re: How maxed out cards affect your FICO

jaybee — Thu, 12 Apr 2007 23:03:12 GMT

Antredd

That is interesting, WAMU pulled my TU which is my highest as well (686).

Re: How maxed out cards affect your FICO

Brammy — Thu, 12 Apr 2007 23:35:54 GMT

Pulled TU on me as well. May have something to do with which area you're applying from. I know they use either TU or Exp nothing from EQ

Re: How maxed out cards affect your FICO

LadyFICO — Fri, 13 Apr 2007 09:01:00 GMT

First off congrats I am new to the forum as far as writing goes. Brammy according to calculations you went from max on one card and paid it and got 15 another said he paid 2 cards down to under 20 and got 17 points I'm not sure where the person was maxed to begin with or whether FICO allows huge jumps per cc. If it does I just paid 10 cards down below 25% all at their max. I am optimistic about wishing to gain 15 points per card which would immediately put me at my goal but based on what others have said sometimes paying all to soon doen't necessarily give you that big boost. Any suggestions?

Re: How maxed out cards affect your FICO

Brammy — Fri, 13 Apr 2007 12:12:34 GMT

LadyFICO wrote:
First off congrats I am new to the forum as far as writing goes. Brammy according to calculations you went from max on one card and paid it and got 15 another said he paid 2 cards down to under 20 and got 17 points I'm not sure where the person was maxed to begin with or whether FICO allows huge jumps per cc. If it does I just paid 10 cards down below 25% all at their max. I am optimistic about wishing to gain 15 points per card which would immediately put me at my goal but based on what others have said sometimes paying all to soon doen't necessarily give you that big boost. Any suggestions?

Maxing out even one card can cause a huge decrease in your FICO score it looks as ifyou're living beyond your means (using cards to live on). My increase came in one month. he card wasn't even actually maxed out it was just reporting high balance and no credit limit. Don't worry you will get a boost maybe not 15 points a card but maybe so.

Before I learned how the program worked, I thought that as long as I kept my card from going overlimit and paid on time, my scores would increase, its only from places like this and a little research that I learned the TRUE rules of the game.

I'll put it like this, in the beginning I had one subprime card that was consistently over 50% though I paid on time and never minimum. I only got offers on other subprimes cards. When that card ratejacked me due top a mistake on my CR I got mad and paid it off with the intention of closing it. Within a month of bringing the utilization down on that card under 10% I started to get offers from near prime lenders. All the time I thought I was getting subprime offers simply due to my BK.

I started taking them up and closed the subprime card and suddenly got limits higher than I ever thought possible. The last online approval was so far out of my expectations that I shouted an expletive when I logged into the account after approval and saw my limit. I even called the card company and asked if they were sure about the limit even though I could see it right there on my computer screen:smileyvery-happy:

For me, reducing utilization not only took me out of subprime territory but put me in the position to get some nice prime offers.

Message Edited by Brammy on 04-13-2007 08:11 AM

Message Edited by Brammy on 04-13-2007 08:12 AM

Re: How maxed out cards affect your FICO

LadyFICO — Mon, 16 Apr 2007 15:32:17 GMT

I'm looking forward to being able to post the same results soon. BTW it wasn't so much living beyond means most of the subprime cards already come to you with a high util due to all the setup fees maintenance fees, etc I just opened them for the purpose of boosting my score at the time not thinking about util and that I could only afford to pay the minimum and now I realize that paying more each month and keeping util low is part of the rules of the FICO game. I hope to one day become a master of this FICO game. Do you know any other things I can do to boost the score other than sit and wait at this point? Have you ever tried to goodwill anything?

LadyF

Re: How maxed out cards affect your FICO

naima — Tue, 17 Apr 2007 14:48:44 GMT

Hello Ladyfico! I don't believe that sitting and waiting is the best method for increasing a score. In another forum I mentioned that I boosted my score from 585 to 718 in one year. First of all, I never pay the minimum anymore (the 3 months I did pay the minimum, I watched my score drop steadily). Also, whenever I get extra cash I make big paydowns on my accounts. Several months ago I paid several revolving accounts off completely and am still seeing the positive effects of this action. I would never consider closing my unused accounts, because this is known to lower your score, sometimes significantly. The reason for this is that when you close accounts, you wind up changing your available credit to balance ratio (one of the things a fico score strongly considers). Also, it's a wise idea to think ahead whenever you charge a purchase to a revolving account. Before I make such purchases I ask myself, "how long will it take me before I will be able to pay this off and how much will I be able to pay off on this purchase next month?". Being proactive with ones accounts can definately make a huge difference with ones credit score. One of the things presently effecting my score is that my oldest account is just two years old. I look forward to my accounts aging and thus increasing my credit score. Finally, I think the best thing people can do in relation to their credit scores is to educate themselves as much as they can about the credit scoring process. Knowledge brings power and allows people to actively effect the outcomes of their future.

Re: How maxed out cards affect your FICO

chris1111 — Tue, 17 Apr 2007 15:02:12 GMT

Hi!

Thanks for all the insight. Hubby and I too filed for bankruptcy a few years back (2003) due to loss of his job. We are still in our home, but have had to refinance twice! We are trying to bring up our scores to get a good fixed mortgage rate next year. We only have 2 credit cards totalling $1050 in debt, but they are almost maxed. I have been doing like you did, paying more than minimum and always on time. What is the best course of action? Pay them at least 75% off asap? Money is tight, but it will be even tighter if we don't qualify for a fixed rate next year. How much could you expect our scores to increase? Also, any other things you can think of to bring them up? Thanks in advance, Chris.

Re: How maxed out cards affect your FICO

Brammy — Tue, 17 Apr 2007 15:14:42 GMT

You have two utilization factprs that hit your score. Any card over50% will cause a drop. Maxed out causes a major drop. After that you needto look attotal utilizatin. Below 30% is good, below 10% is best

HTH

Re: How maxed out cards affect your FICO

Irvin — Tue, 17 Apr 2007 15:21:27 GMT

I just made a purchase of $400 on my capital one card yesterday which i already owed $89 on. It has a limit of $500. In other words, it is maxed out. However, I plan on paying roughly around $350 BEFORE the next statement is issued, which is 5-10-07 (I should be able to pay off $350 on 5-8-07). That would leave me around $150ish balance when my next statement comes out. How do you guys think it will affect my credit score?

Thanks.

Re: How maxed out cards affect your FICO

Brammy — Tue, 17 Apr 2007 15:25:04 GMT

Irvin wrote:
I just made a purchase of $400 on my capital one card yesterday which i already owed $89 on. It has a limit of $500. In other words, it is maxed out. However, I plan on paying roughly around $350 BEFORE the next statement is issued, which is 5-10-07 (I should be able to pay off $350 on 5-8-07). That would leave me around $150ish balance when my next statement comes out. How do you guys think it will affect my credit score?

Thanks.

Cap one doesn't reort limit so your high balance with reflect as the limit. The 150.00 you have left is the most you should have on that card with that high blance reporting and never let it rise above that unless you can get a CLI and max it oout and pay it back down to 30% of the high balance before the statemnet date

Re: How maxed out cards affect your FICO

Irvin — Tue, 17 Apr 2007 15:31:29 GMT

They won't give me a credit line increase. I just tried a month ago.

If i wait until the statement comes out, have the balance of nearly $500 show up on my report...and pay it off immediately (the entire 500 which i cant afford by end of may) so that next month's statement has a lower balance..will that help me? My actually limit is $500 on the card but when i look at the report, it says my limit is $0 and a High balance of $240.

Re: How maxed out cards affect your FICO

Brammy — Tue, 17 Apr 2007 16:05:25 GMT

Irvin wrote:
They won't give me a credit line increase. I just tried a month ago.

If i wait until the statement comes out, have the balance of nearly $500 show up on my report...and pay it off immediately (the entire 500 which i cant afford by end of may) so that next month's statement has a lower balance..will that help me? My actually limit is $500 on the card but when i look at the report, it says my limit is $0 and a High balance of $240.

If you pay it off after the statement date, Cap 1 may not report this activity for three months. They have a habit of reporting 0 balance accounts quarterly whic I learned from expereince. Pay it down but leave 5.00 on the balance. %.00 reporting wont reflect harshly and it will update that month

Message Edited by Brammy on 04-17-2007 12:05 PM

Re: Do you use score monitoring program on this site? I signe...

karenkkj — Tue, 17 Apr 2007 15:50:45 GMT

I use the My fico score watch. I have been watching my score change a lot over the last couple of months, but I have been making a lot of changes. It is normal for your score to not change for a long period of time. I have been watching my scores for about 2 months now. The first month it went up about 50 points, the second month it hasnt done anything.

My score went up 50 points because I: 1-disputed negative items, 2- requested credit limit increases and got one, 3. had a negative item removed, 4. paid a balance on a credit card by $2,000.

If you have major changes, you will notice your score change.

Karen

Loan Officer in UT

Re: How maxed out cards affect your FICO

LadyFICO — Sat, 28 Apr 2007 12:58:20 GMT

Util is key! I'm also thinking my credit profile is aging gracefully. I noticed that in months that I paid on time and maybe slightly more than the min my fico barely moved. As I said I paid off ten but I know it will take awhile before I see all the results of the paydowns due to statement cuts and when they report to the bureau. On my equifax still nothing has updated. On TU two cards have updated and also an old collection (paid) fell off and I saw an increase of approx 56 points in five weeks! My Experian has increased approx 39 points on this bureau I show only 1 account updated and 1 paid collection fell off. Also, this bureau and equifax lists all my cc where as tu does not. Equifax has updated yet for whatever reason so I'm still waiting. Even with the big boosts I haven't reached my goal but when you play by fico rules you will eventually win :smileyhappy:

I know over the course of the next 45 days I should continue to see marked improvement in my FICO. I'll continue to keep you posted.

Re: Do you use score monitoring program on this site? I signe...

BBOP — Sat, 28 Apr 2007 16:45:23 GMT

Be sure that your alerts are set appropriately.

Ex: If your current credit score is 600 and you would like to get an alert when it changes, set the alert to 601. A change of 1 point in the score will trigger a notification to you. If you notice that your score changed and you did not receive a notice, (after taking the above action) then I would contact FICO customer service to have them fix the problem. :smileywink: