Pay in Full or Overtime - Util.

[Anonymous]

Hi All,

This is my first post but I have done some reading on this site and I still have a couple of questions.  My current scores are 653 TU and 603 Equifax.  I currenty have 4 credit cards and two of them are maxed out while the other two have small balances (I mean real small). I have had credit for about 5 years.

CITI - 3300 - Bal. 3200

CITI - 2200 - Bal 2000

I just ran into a good chunk of money and My question is, will my score increase by the same amount if I pay it off in full or if I pay over time, say 500 a month?  Does it matter? I did the score estimate and it said pay over time but the range was huge (680-720).  My current untilization is at 50% because I just open a new card and rec. a large limit.

Also, could I expect to get to over 700 in TU if I pay down to 10% of the credit limit?  Should I pay the others to a zero balance?

[Anonymous]

The Fico Score has no memory. The number is calculated from your current state. So save yourself some interest and pay it off .

[Anonymous]

Thanks for your response, is the score estimate accurate?  Do you have any estimates where I will end up?

[Anonymous]

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@Anonymous wrote:
Thanks for your response, is the score estimate accurate?  Do you have any estimates where I will end up?

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A 50% util gives you quite a ding on your score, so you might reach 700 if you do everything right. If you have 4 credit cards, pay three of them down to zero and let one report a tiny balance (below 9%; less might be even better). This doesn't mean you have to carry a balance. You can still pay everything off and not pay a dime in interest, but you should have three cards paid off before the balance cuts, or whenever the card reports, which might vary from cc company to cc company, and pay the last one off before the due date.

Message Edited by Ulan on 02-15-2009 03:41 PM

[Anonymous]

are you planning on trying to get a mortgage or car loan real soon?  if not, with most of the credit card companies doing CLD after the balance is paid. would possibly entertain holding on to your money till we get over this slump. there have been posts about ccc reducing limits without any notice. would consider paying alittle over min due for awhile till the ccc lighten up alittle.  just a thought

[marty56]

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@Anonymous wrote:
are you planning on trying to get a mortgage or car loan real soon?  if not, with most of the credit card companies doing CLD after the balance is paid. would possibly entertain holding on to your money till we get over this slump. there have been posts about ccc reducing limits without any notice. would consider paying alittle over min due for awhile till the ccc lighten up alittle.  just a thought

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Problem is that many CCCs are playing "chase the balance", where they keep lowering your CL to what you owe.  This will leave the card maxed out and leave you open to a cascading effect from other CCCs.

Better to pay down your balances to 0 and if a CCC reduces yout CL aftet hat or even closes the account, it may be eaier to get a new credit card.

[oracles]

Hi Thatguy and welcome to the forums

First-

The simulator is stating your score will be higher over time vs paying it all off now.

The reason for this is because you will have more history with all cards when you pay it off in 6 or how ever many months as opposed to paying it off now. This is the only reason why you would have a higher score. It is a snapshot of your report at that moment.

Second

Many are speaking about chasing the balance. If you pay the minimum, you still will be close to the limit and have a high util%. If you were to pay it off, the limit may go to 500 but the balance would be 0 and you will not have a high util% but actuallly zero and this will help you. Also this will help your overall util%.

it is better to pay it off, have low util% and pay no interest thus saving money.

Hope this helps

[Anonymous]

Hi all thanks for your response!!!

So I am guessing my best plan to max my score would be to pay 300-400 a month over the next year or so to gain the max points rather than paying it off in full. (Even though I will take a little hit with the interest, APR only 5%)

And I will be able to notice the the CCC lower my limit after I make the payment right? Or the month after?

I had also been late on a few payments and sent GW letters so hopfully I can get those cleared up.

But thats about it, I hope to be in the 700's by december of this year?  This is def. possible right?

[WhirledPeasPlease]

I'd say PIF NOW.  Why give them more of a chance to CLD you as your balances decrease slowly?  PIF and if they're going to CLD you now AND possibly later, at least you'll know.  I'd rather know now, know who is worth my business and save the money you'd waste on interest.

PIF, or down to at least 9% or less and pull scores again in 6 weeks (or whenever you know your statements have dropped).

I made it into the 690s before I ran my util back up to 30%.  I had several late accts on my reports (90d x 13+, collections and a charge-off) with the last derog info in April 2005. 

It can be done.  Good luck!

[Anonymous]

Thanks again guys for all the input.  So I am guessing the points will be the same whether I pay in full or overtime if I had high balances?  Can someone please just confirm this for me?