Progress? or false hope?

[BP2003]

Hello All,

During the last few months, I have been working on repairing my credit.  In March of this year I had the 3 credit reports pulled by a loan officer – they were as follows – 511 Equifax, 547 Transunion & 606 Experian. 

I signed up for Scorewatch near the end of April (of this year, of course), and at the time Scorewatch was reported an Equifax score of 547.  Could that be correct?  I had 2 credit cards (both were over the $500 limit) that I paid just below the credit limit a few weeks before I signed up for Scorewatch.  Could that have really made my score jump 35 pts. from just paying a balance to drop below the limit of 500?  Additionally, earlier this month I received a notice from Scorewatch that my Equifax had improved +6 pts. (up to 553), due to available balance increase.  Is this normal?  Should I be seeing these kind of gains from such minimal improvement efforts?

Also, I ran a scoring simulation and got the following “Best Action”:

Best Action - Pay Down 90%-100% of Your Credit Card Balances - Over the Next 24 Months

How you manage your revolving accounts (credit cards, department store credit cards, revolving lines of credit) is heavily weighted in the FICO® score. FICO® scores evaluate your revolving accounts in a variety of ways, including comparing your balance to your available credit, as well as looking at the number of accounts with a balance. A general rule to remember: consistently carrying lower balances on your revolving trade lines will generate positive points for your score.

This simulation was based on your paying down 90%-100% of your overall credit card balances over a period of 24 months. In general, your score will be helped as your credit history lengthens and you establish FICO® healthy behavior. So this score simulation took into account both your lower balances and the aging of your credit history.

The simulation is giving me a potential range of 647-687.  I only have approx. 800 in credit card debt.  If I can pay that down to less than 10% Util, would it still require the 24 months to see that type of improvement?  Or is it saying that I need to make small payments over the next 2 years to achieve the potential simulated score?

Thanks in advance for all of your help!

[Anonymous]

Yes!  Credit Card utilization hurts your score the most....going over the credit limit also hurts a lot.

If you pay off your cards or get them down to 1-9% util I wouldn't be surprised if your scores another 50 or more points ( I remember a poster reporting an 80 point gain for getting their Util down)

[ckostecki]

I got a 30 point boost going from 27% to 12% util. Waiting for my last charges to fully post to pay the CC down to 1% and see what changes.

[marty56]

16 points on EX in going from 10% to 4%.

Paying down util is the quickest way to boost your score and you get an added pluses in that a manual review for new credit or a CLI will also like it.

100% progress.

[fishbjc]

Absolutely!!!!! 

[BP2003]

Just an update   Not too much, but enough to keep myself and others motivate to make improvements.

In March I had the following scores:

511 Equifax

547 Transunion

606 Experian

Now after almost 5 months of work, my scores are as follows:

594 Equifax

610 Transunion

631 Experian

My LO approved me for an FHA up to $125K, and it feels great.

The major improvements came from paying utilization from almost 120% down to currently 36% (I'm still working on getting it under 9%).  Also, my credit union removed two of my FIVE 30 day lates after I signed up for direct deposit on my car payments (Hopefully after several more months of weekly payments, they will drop all of the lates)

[southernficoaddict]

I gained 56 points with EX score in 9 days because of decreased CC util. 

[Anonymous]

That is great news BP2003! I hope you find a great house and enjoy it and your rapidly rebuilding credit.

[southernficoaddict]

Great news!!!  Good for you!