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Credit Score Changes

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NuMelc
Valued Member

Credit Score Changes

Hello,

 

My TransUnion score is brutal and I need to improve it and I have a couple of questions. 

 

The "bad" marks for me are amount of debt and amount of new credit.

Do both of these factor the same amount?

Also, I have a auto loan that will be coming off at some point as I recently sold the vehicle and paid off the loan. How long should this take? 

I know I have high credit card utilization and am working on paying those down. Is there any method to this or should I just pay as much down on the one with the highest rate?

 

The reasons for my questions revolve around a mortgage. I am currently selling my current home and will need to buy a new home where I am moving. However these credit scores may pose a problem. I am planning to take half of the proceeds from my house selling to pay off my credit cards.

 

Any help and advice is greatly appreciated. 

Message 1 of 7
6 REPLIES 6
guiness56
Epic Contributor

Re: Credit Score Changes

New debt is 10%,  amounts owed are 30%.

The auto loan won't be removed from your CR.  It will update to paid/closed and stay for up to 10 years -/+ from date closed.

 

Are any of your CC maxed out?  If so, at least get them under that point which is around 90%.  For the rest, while making minimum payments on the others, start with the smallest balance and pay that off, use that money and pay off the next smallest balance.  Keep doing this until all but one are paid off and report at 9% or below.

 

Doing it this way will show more cards with 0 balances quicker, which FICO likes to see.

 

There are other ways of doing it also.  Like paying off the higher APRs first.  This may take longer to show 0 balances.

 

Message 2 of 7
NuMelc
Valued Member

Re: Credit Score Changes

Thanks for the response and help.

 

None are maxed, but most are high. I have 4 cards. Their utilization is 92%, 85%, 84% and 67%.

 

I worded the question about the auto loan wrong, but you answered what I was looking for. However, after comparing my equifax to my transunion the auto loan shows as paid on equifax (which is higher) and does not show as paid yet on my transunion. 

 

How long do credit inquiries stay on the report?

 

 

Message 3 of 7
guiness56
Epic Contributor

Re: Credit Score Changes

Credit inquiries stay for 2 years but only count in your score for 1.

 

Your 92% CC is maxed out.  Anything over 90% is maxed out by FICO and you get dinged for those.

 

You may see a few points by the auto loan showing paid.  It could go either way.

Message 4 of 7
NuMelc
Valued Member

Re: Credit Score Changes

OK,

 

Say I were to pay off all my credit cards this month. Would I see a big increase once they were reported as paid off or would it be better to gradually pay them down?

 

Also with 90% being maxed, will I see any increase going from 92% to 80% utilization?

Message 5 of 7
guiness56
Epic Contributor

Re: Credit Score Changes

You may see a small bump going from 92% to 80%.  You won't be maxed out any more.

 

The sooner they are paid down the sooner you will see a bump.  Don't let them all report 0 balances.  Let all but one report 0 and the other at 9% or below.

Message 6 of 7
Shogun
Moderator Emeritus

Re: Credit Score Changes

Yes, your util is holding your score down.  Lowering util is one of the fastest and easiest ways to get a "bump" in your score.  Paying off your auto loan shouldn't affect you much.

Starting Score: 504
July 2013 score:
EQ FICO 819, TU08 778, EX "806 lender pull 07/26/2013
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Current scores after adding $81K in CLs and 2 new cars since July 2013
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