Just paid off 11.3k in credit cards, 6.2k in Citi personal loan... and now I'm terrified.

[Anonymous]

Ok, so I just got 26.4k back from a Lemon Law case that I won (Ford).

I used that money to pay off all of my credit cards:

Discover It - 5,871 (6,500 limit)

Citi Preferred - 3,404 (4,800 limit)

Citi Double Cash - 1,735 (3,700 limit)

Capital One Platinum - 554 (2,550 limit)

I also paid off my Citi personal loan that I opened just last October (2017).

Original loan amount - 7k. Paid off - 6.2k. Account was only open for 11 months.

I also have a Chase Card with a 6.5k limit, but have zero balance, as well as Capital One Quicksilver 2.5k limit with zero balance. After paying off the balance on my Citi Double Cash, Citibank raised my limit to 4.7k.

My utilization of all of my credit card accounts before payments was at 43%. I made these payments just four days ago, so, obviously the 3 credit bureaus have not updated any of these changes and updated my scores.

My FICO 8 (Experian) is 674; (Equifax) is 675; (TransUnion) is 690. But again, these scores are with the 11.3k total balance on cards, and 43% utilization of avaiable credit on all of my cards. Also, with a balance, still, of 6.2k out of 7k on a Citi bank loan.

I didn't know that I needed to keep the personal loan. I thought that by paying off my debt (even a bank loan) early would improve my credit. I need to buy a car, and now I'm terrified that I wont get a massive uptick in my score(s). Thus, a great finance term.

I have zero late payments, collections, etc. I have a paid off home that is closed, and a paid off car (the Lemon) that is closed.

My FICO scores have been as high as 760 in the past... and as recent as January of this year, were still above 700 for some. But I started to accrue massive balances on my cards beginning around March of this year and my ratings plummeted. 

I need to buy a new car (Honda) to replace the Lemon, but after reading this board, it seems that I made a massive, massive mistake paying off the Citi bank loan, because now, all of my open accounts are credit cards. No variety like everyone here says is so important to FICO. I am terrified that instead of a 60-80 jump in score, it will be closer to 30-40. If that.

As I sit here and wait for my FICO scores to update, so that I can shop around for a car loan, I am less and less optimistic about my next credit score update next month. 

Can anyone give any feedback? I would so greatly apprecaite it. What I am asking is, am I screwed because I paid off that bank loan, even having paid off 11.3k (43% utilization) in credit cards? I was hoping for a massive jump, should I brace myself for disappointment?

I so greatly appreciate anyone who takes a minute or two to reply, in advance. I am stressed out. So stressed out.

[RicHowe]

First, get your priorities right. What's important is NOT having a loan, it's being debt free.

Second, with your multiple cards, you meet the credit mix criteria just fine. Opening up a loan at this point might add a few points, but nothing to stress over.

Keep your accounts in good standing, pay in full and avoid paying interest. Your scores will rebound nicely soon enough.

[Anonymous]

---

@Anonymous wrote:

Ok, so I just got 26.4k back from a Lemon Law case that I won (Ford).

I used that money to pay off all of my credit cards:

Discover It - 5,871 (6,500 limit)

Citi Preferred - 3,404 (4,800 limit)

Citi Double Cash - 1,735 (3,700 limit)

Capital One Platinum - 554 (2,550 limit)

I also paid off my Citi personal loan that I opened just last October (2017).

Original loan amount - 7k. Paid off - 6.2k. Account was only open for 11 months.

I also have a Chase Card with a 6.5k limit, but have zero balance, as well as Capital One Quicksilver 2.5k limit with zero balance. After paying off the balance on my Citi Double Cash, Citibank raised my limit to 4.7k.

My utilization of all of my credit card accounts before payments was at 43%. I made these payments just four days ago, so, obviously the 3 credit bureaus have not updated any of these changes and updated my scores.

My FICO 8 (Experian) is 674; (Equifax) is 675; (TransUnion) is 690. But again, these scores are with the 11.3k total balance on cards, and 43% utilization of avaiable credit on all of my cards. Also, with a balance, still, of 6.2k out of 7k on a Citi bank loan.

I didn't know that I needed to keep the personal loan. I thought that by paying off my debt (even a bank loan) early would improve my credit. I need to buy a car, and now I'm terrified that I wont get a massive uptick in my score(s). Thus, a great finance term.

I have zero late payments, collections, etc. I have a paid off home that is closed, and a paid off car (the Lemon) that is closed.

My FICO scores have been as high as 760 in the past... and as recent as January of this year, were still above 700 for some. But I started to accrue massive balances on my cards beginning around March of this year and my ratings plummeted. 

I need to buy a new car (Honda) to replace the Lemon, but after reading this board, it seems that I made a massive, massive mistake paying off the Citi bank loan, because now, all of my open accounts are credit cards. No variety like everyone here says is so important to FICO. I am terrified that instead of a 60-80 jump in score, it will be closer to 30-40. If that.

As I sit here and wait for my FICO scores to update, so that I can shop around for a car loan, I am less and less optimistic about my next credit score update next month. 

Can anyone give any feedback? I would so greatly apprecaite it. What I am asking is, am I screwed because I paid off that bank loan, even having paid off 11.3k (43% utilization) in credit cards? I was hoping for a massive jump, should I brace myself for disappointment?

I so greatly appreciate anyone who takes a minute or two to reply, in advance. I am stressed out. So stressed out.

---

This might be moved to personal finance, but I can let you know what I know. Paying off debt is always a good thing. Bringing your utilization under 10% will probably have a greater effect than closing your loan. The closing of the loan won't be that drastic. Don't be so stressed you have a paid off home, and almost no debt! That is really good! Talk to your FIs about securing a rate do not get financing through the dealership! Keep your no annual fee cards open to keep an aged history, and don't worry so much.  When I paid off my 5 year old car loan at 23 I didn't even notice the drop in score. 

[HeavenOhio]

Welcome @Anonymous.

Yes, the lack of an open installment loan will ding your FICO8 score. But it doesn't necessarily ding all FICO scores. When you shop for your car, you also get to shop for loans. Different lenders will pull different bureaus and will use different scoring models. I think there'll ultimately be a match that works for you.

The other thing that may ding you is that it looks like you might be set up for the "all cards at zero" penalty. But that's easily fixed. Put a small charge on your Chase card. Once it posts, ask Chase to report the balance to the bureaus. Discover will also report upon request, but I'm guessing that your grace period probably hasn't yet been reset on that card. By putting the charge on Chase, you'll avoid interest.

Once all is said and done, my bet is that paying off your cards will offset the lack of an installment loan.

[K-in-Boston]

Welcome to the forums and congratulations on paying off all of that debt! I agree that if you leave a small balance of at least $5 reporting on at least one card you should see a good increase in your scores. The score used will depend on the lender, so while having an open loan may help with FICO 08 it may hurt another score if you open a new loan.

[Anonymous]

---

@Anonymous wrote:

Ok, so I just got 26.4k back from a Lemon Law case that I won (Ford).

I used that money to pay off all of my credit cards:

Discover It - 5,871 (6,500 limit)

Citi Preferred - 3,404 (4,800 limit)

Citi Double Cash - 1,735 (3,700 limit)

Capital One Platinum - 554 (2,550 limit)

... my utilization of all of my credit card accounts before payments was at 43%. I made these payments just four days ago, so, obviously the 3 credit bureaus have not updated any of these changes and updated my scores.

---

Actually, your situation prior to the CC payoffs was much worse than a utilization of 43% -- and hence your situation after everything reports will be much better than you realize.

That is because your discover card was at an individual utilization of > 90%.  Individual util matters too.  That maxxed out card was hurting you a lot in addition to the 43% total utilization.

Get exactly one card reporting a small balance (like $10) with all other cards reporting $0 and you will be fine.  Choose the card for the positive balance that has a statement date after Oct 2 but as close to Oct 2 as possible.  You want to get that $10 reporting ASAP.

[Anonymous]

---

@Anonymous wrote:

---

@Anonymous wrote:

Ok, so I just got 26.4k back from a Lemon Law case that I won (Ford).

I used that money to pay off all of my credit cards:

Discover It - 5,871 (6,500 limit)

Citi Preferred - 3,404 (4,800 limit)

Citi Double Cash - 1,735 (3,700 limit)

Capital One Platinum - 554 (2,550 limit)

... my utilization of all of my credit card accounts before payments was at 43%. I made these payments just four days ago, so, obviously the 3 credit bureaus have not updated any of these changes and updated my scores.

---

Actually, your situation prior to the CC payoffs was much worse than a utilization of 43% -- and hence your situation after everything reports will be much better than you realize.

That is because your discover card was at an individual utilization of > 90%.  Individual util matters too.  That maxxed out card was hurting you a lot in addition to the 43% total utilization.

Get exactly one card reporting a small balance (like $10) with all other cards reporting $0 and you will be fine.  Choose the card for the positive balance that has a statement date after Oct 2 but as close to Oct 2 as possible.  You want to get that $10 reporting ASAP.

---

First off, thank you for the reply, CreditGuyinDixie. All of you, thank you, so much for your time and advice.

The closest card I have that posts after the 2nd, is October 8th, which is my Capital One Platinum. Should I use that card, or do as a poster above recommended, and use Chase for a small purchase, then ask them to report it to the bureaus once it's posted? And if I do the latter, should I purchase something this evening so as to give enough time for the purchase to post to my card, then ask Chase to report it on the 3rd, which would be as you advised, as close to the 2nd as possible?

Also, I have a card with negative-136 balance -- my Citi Thank You -- and that closes on the 1st (Monday). Does having a negative balance equal bad for my credit rating, or is that the same as having a zero balance? (It's negative because I purchased some items with it this a.m., then paid for the items with my checking account while the purchases are still pending.)

My Discover is also negative, because when I paid it off on Tuesday, I included in the payment the accrued, prorated interest, which was ~$29 more than the actual balance (they have a tool that lets you know the true payoff amount), and that **bleep** card's statement date is the 12th, so it will be in the minus for a while. Are both of these card's essentially at zero balance, or could I get dinged for these two cards?

I'm so sorry for so many questions... I am very new to the intricacies of FICO scores, it is fascinating, yet terrifying. I appreciate everyone's feedback, and any future feedback, as well. 

[K-in-Boston]

No need to apologize for asking questions - we're all here to help each other, and hopefully in the future you'll help someone else here, too.  The negative balances will report as $0.  I think making a small purchase on your CapOne would be fine, and let that report as your statement closing balance unless you plan to apply for the loan prior to that.  Then I think you might be happily surprised when you check your scores after that.  Do you have a timeline for the auto loan?

[Anonymous]

---

@K-in-Boston wrote:

No need to apologize for asking questions - we're all here to help each other, and hopefully in the future you'll help someone else here, too.  The negative balances will report as $0.  I think making a small purchase on your CapOne would be fine, and let that report as your statement closing balance unless you plan to apply for the loan prior to that.  Then I think you might be happily surprised when you check your scores after that.  Do you have a timeline for the auto loan?

---

Thank you, K-in-Boston. I will quit apologizing And thank you for the reassurance about the negative-balance cards!

I need the car/loan, ASAP. But I refuse to purchase one/take out a loan until my scores rebound. I am very open to the Chase card idea, from the poster above.

But I've also read here, in other threads, that it's more or less anyone's guess (my paraphrase) when the banks give the updated account info to the bureaus? And if that's the case, the Chase scenario seems all the more prudent, given my urgency? 

[Ardecko]

Most cards report a few days after your statement. I remember one(in concept, not name) that reports on the first. Chase reports any time your balance becomes (or parses below) zero.