Best way to increase score when paying down credit cards?

[butters149]

Hi, I just got a pretty good paying job and really have no expenses (only about $200/month).  The below are my credit cards and balance with credit limits.  Pretty high util so far, just paid down Chase 1 and Chase 2 recently.  I am planning to apply for an autoloan and buy a car around $32k.  What is the best way to get my scores up.  I heard you can pay down your CC but dont make it $0 balance?  Where should I keep it at?  And also do I have to actively be using it for purchases?  Also how long will my scores update after I paid the credit cards down?  My score was 569 in September and now its 579 LOL.  Better but nothing to brag about.  All my cards were nearly maxed out until this week when I got my first paychecl.  So I assume my scores will go over 600 once I have utils down.

Chase 1 - $100/$1600
Chase 2 - $855/$1400
Smart Connect - $171.88/$250
Amazon - $515.23/?? forgot
BofA - $451.63/$500
Bill Me Later - $992.96/$1000

[titanofold]

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@butters149 wrote:

Hi, I just got a pretty good paying job and really have no expenses (only about $200/month).  The below are my credit cards and balance with credit limits.  Pretty high util so far, just paid down Chase 1 and Chase 2 recently.  I am planning to apply for an autoloan and buy a car around $32k.  What is the best way to get my scores up.  I heard you can pay down your CC but dont make it $0 balance?  Where should I keep it at?  And also do I have to actively be using it for purchases?  Also how long will my scores update after I paid the credit cards down?  My score was 569 in September and now its 579 LOL.  Better but nothing to brag about.  All my cards were nearly maxed out until this week when I got my first paychecl.  So I assume my scores will go over 600 once I have utils down.

Chase 1 - $100/$1600 Keep between $1 and $144
Chase 2 - $855/$1400 Report $0
Smart Connect - $171.88/$250 Report $0
Amazon - $515.23/?? forgot Report $0
BofA - $451.63/$500 Report $0
Bill Me Later - $992.96/$1000 Does not factor into your utilization

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Bill Me Later doesn't report to your CRs. It neither helps nor hinders your scores. You want all CCs to report $0 except one. The last CC you'll want to report between 1% and 9% of its CL.

Within a month all the balances should be reported. I think you can expect a rather large bump in your score by bringing down your utilization.

[titanofold]

And you only need one CC to report a balance for you to be considered as actively using your CCs. The other CCs you'll want to use every few months to keep from being closed. They don't need to report a balance, the CCCs just need to know that you're still using the account.

And one more point. Utilization only matters when you're going to apply for something. Scores have no memory of it. So, you only need to worry about optimizing just before an application, but not so much after. (Of course, be responsible with your spending power.)

[butters149]

Thanks!  Yes I can have all balances paid off by mid-February.  I do have student loans though, but I don't think that should factor into too much whe napplying for auto loans.  Do you think I can get up to 700 from 579 (this is credit karma, doubt its accurate)

[butters149]

I just bought the myfico trial scorewatch.  My current score from Experian is 582.  Now here is my question.  My total revolving open/close balance is $4167.  Now when I go simulate, it shows my score will increase to 632 if I paid off $4100 of it, leaving $67 behind.  Now when I simulated to pay all $4167, my score shows 622.  Why is it lower if i decide to make my balance $0?  

[grassfeeder]

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@butters149 wrote:

I just bought the myfico trial scorewatch.  My current score from Experian is 582.  Now here is my question.  My total revolving open/close balance is $4167.  Now when I go simulate, it shows my score will increase to 632 if I paid off $4100 of it, leaving $67 behind.  Now when I simulated to pay all $4167, my score shows 622.  Why is it lower if i decide to make my balance $0?  

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Don't pay much attention to the simulator.  It's rarely correct, if ever.  Pay all your cards down to $0  The card with the largest limit, leave like 1% on it.

You need those scores drastically higher if you plan to get any kind of rate on a $32k car.  That's the last thing you need right now.

Just because you got yourself a good paying job now (and congrats) don't live like you do.  learn how to use your credit and how to build it first.  You sound like myself about 8 years ago and you can see where I've been in my signature.

[IamB2]

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@butters149 wrote:

I just bought the myfico trial scorewatch.  My current score from Experian is 582.  Now here is my question.  My total revolving open/close balance is $4167.  Now when I go simulate, it shows my score will increase to 632 if I paid off $4100 of it, leaving $67 behind.  Now when I simulated to pay all $4167, my score shows 622.  Why is it lower if i decide to make my balance $0?  

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If all cards report $0 balance, I think I read somewhere that it defaults to 30%.