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Hi all, as the title says, Im new here and new to credit. Opened up my first card six months ago. Then a month later applied for two more and got approved for those. So I have a quick question. I have three revolving balances which are close to their limits and I'm planning on paying them all off within the next two weeks. So my question is, when I pay them off will I see an instant increase in my credit score? Not any absurd increase like 100 points but something like 20 maybe 25? Or does credit work the complete opposite of that?
thanks.
hi, welcome to the forums.
yes your scores will jump up from about 10 points or more. you will see them once the credit card company reports to the credit agencies that could take a bit depending how often they report. usually its once a month.
@mynRalph wrote:Hi all, as the title says, Im new here and new to credit. Opened up my first card six months ago. Then a month later applied for two more and got approved for those. So I have a quick question. I have three revolving balances which are close to their limits and I'm planning on paying them all off within the next two weeks. So my question is, when I pay them off will I see an instant increase in my credit score? Not any absurd increase like 100 points but something like 20 maybe 25? Or does credit work the complete opposite of that?
thanks.
Welcome to the forums. I agree with Sapingo on this one.
@mynRalph wrote:Hi all, as the title says, Im new here and new to credit. Opened up my first card six months ago. Then a month later applied for two more and got approved for those. So I have a quick question. I have three revolving balances which are close to their limits and I'm planning on paying them all off within the next two weeks. So my question is, when I pay them off will I see an instant increase in my credit score? Not any absurd increase like 100 points but something like 20 maybe 25? Or does credit work the complete opposite of that?
thanks.
Welcome to My Fico
You should see a good score increase especially if they are all maxed out (reporting greater than 89% of its CL). You want to leave one of the cards reporting a small balance of no more than 9% of its CL, you get dinged by Fico for all cards reporting 0. If you are paying interest pay them all off in full on or before the due date and then for the small balance just charge something and let it report.
Ever since I got my three cards, I've been paying them all over the minimum amount due, one double the min amount due and the other two 50/35, paid/min amount due.. All three just like that for the past six months. Disappointed my CS is only fair
If you have no baddies it should do quite a jump. dont worry fico scores dont have a long term memory of your utilization, once its paid down scores goes up and when you get in debt scores drop..
what cards do you have?
@mynRalph wrote:Ever since I got my three cards, I've been paying them all over the minimum amount due, one double the min amount due and the other two 50/35, paid/min amount due.. All three just like that for the past six months. Disappointed my CS is only fair
Discover student, 1st Financial (first card), and Wells Fargo
@mynRalph wrote:Ever since I got my three cards, I've been paying them all over the minimum amount due, one double the min amount due and the other two 50/35, paid/min amount due.. All three just like that for the past six months. Disappointed my CS is only fair
It will improve once you pay off the cc's and only let a very small balance report (less than 9% of the credit line). Paying the min due is not wise and will hurt you in both the short run (score) and the long run (interest paid on the account). This is a good time to get into good paying habits with your credit
@mynRalph wrote:Ever since I got my three cards, I've been paying them all over the minimum amount due, one double the min amount due and the other two 50/35, paid/min amount due.. All three just like that for the past six months. Disappointed my CS is only fair
The minimum isn't relevant for scoring aside from keeping your account current. General recommendation is to never exceed 30% utilization. If you have cards over 90% they're probably considered maxed and you're not only getting dinged for high utilization but for having maxed cards as well.
Even if you get utilization down it's just one factor used in scoring (Amounts Owed below).
http://www.myfico.com/crediteducation/whatsinyourscore.aspx
@mynRalph wrote:So my question is, when I pay them off will I see an instant increase in my credit score?
As stated above it's not instant. Your cards typically report once a month. Most cards report on statement date. The CRA's only receive updated balances when your accounts report. It then takes them a few business days to update. Since a score is generated based on data in a report if the report is updated then a score pulled at that time will take into account the decreased utilization.
Yeah, I meant instant as in will I see my credit score increase the next month.