@courtney091082 wrote:I have just paid down all my credit card debt this month to 4%. Have yet to pull my scores, waiting another few days just to make sure it's all been reported to EQ, TU, and EX.
My question is would I lose that many points if I just paid them all down to 0.
I'm going for a home loan very soon and I'd rather have no debt at all.
Any suggestions?
How long is very soon?
Traditionally the common wisdom here is that all 0's is less from a FICO scoring perspective than fewer than half of your available tradelines reporting a balance and the rest 0. Aggregate balance between 1 and 9% of your aggregate Credit Limit.
There's no hard and fast rule on this one, it very much depends on your individual credit report and what FICO is calculating for you as an individual (your bucketing, etc). If you have time, you can do some experimentation on your own, but most people don't when it comes to revolving utilization and go with the conventional guideline. In my own opinion, a few points either way really doesn't make much difference for loan approvals statistically, but on the other hand, in some situations it could be huge if it pushes you into a higher tier.
You may not lose much, or you may not lose any, or you might even gain some, but if you're applying in the next month or two I'd suggest just going with the stock guidance and doing that. Anything else is definitely marginal improvements which if you have more time (sixish months out) I think is possibly worth chasing, but if you don't have that luxury, going with the typical formula would be hte most defenisible choice.
@courtney091082 wrote:Thanks for your reply, I was thinking of applying in Oct or Nov. I'm just waiting for a couple CO to fall off my husbands reports. The 2 CO hit the 7 year mark this month so I'm hoping they'll fall soon, but it coul be as much as 180 days I know so I think I'll do something like scorewatch and see where I stand right now. We are hoping we'll both have at least high 600s. Most likely we'll go FHA so the scores shouldn't play too big of a part. That's why I was thinking of just paying it all off for piece of mind.
You probably have enough time to try it. If your August report was pretty according to the standard guidelines, check your score. Pay off everything for September statement closes, pull again. If you go down with another month's history and 0's across the board, let something report for October before the mortgage app. Should be OK to try it, and if your score is indifferent to the change, if it gives you additional peace of mind, go for it; however, in this case if it does drop your FICO somewhat, it behooves you to suck it up for a while longer till you get the house 
.
You're right FHA it won't matter on the interest rate, but you have conventional mortgage capable scores as well, and you may want that option. I usually don't care a lot about interstitial FICO scores other than as a curiosity factor; however, I know when I go bowing and scraping to obtain a mortgage next year, I'll likely do everything possible to eek out a few extra FICO points as I know I'll be going with my hat in my hands and it just might make a difference.
I think you are perfectly right. I'm going to pull my free annual report over the weekend and make sure it shows the 4% that I should be at. Then I will pull my scores and see where I am. I'm self employed so I'm hoping to have as high as I can get score wise so hopefully I'll have less complications in the long run. Thanks again!!