I have never been so excited in my life

[Anonymous]

I just paid off 48% of our credit card debt. I cannot wait to see what kind of impact it has on my credit score. I wonder if it will be enough to push me up to 640 so we can buy a house.

[llecs]

That's quite a bit. What is the old overall util vs. the new util? How many CCs do you have? How many of those will or are reporting a $0 balance (if open)?

[Anonymous]

Our utilization will still be quite high.. like 40ish%... but it is much better than 88%.

[llecs]

Congrats. Gain varies. There are many variables, but a gain can be easy to guess if some of those variables are narrowed out. Good luck.

[Anonymous]

What are some of the variables?

[llecs]

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@Anonymous wrote:

What are some of the variables?

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Per utilization, for max points, get all CCs but one to report $0 and get the remaining to report a balance of under 9% of the CL. So, if you dropped utilization from 88% to 40-something, then FICO would look at the overall util as well as the individual util on each card. FICO looks at how many CCs are reporting $0, so dropping util wouldn't result in as many points as if you had dropped overall util with added $0 balances, as an example. Mix of credit is key. Ideally you'd want to have 3 or more CCs reporting. Someone who drops 88% to 40% would gain more if there are multiple CCs reporting than just one reporting. Finally, there might be external issues holding anyone's score back from a larger gain like the scoring bucket, recentness of new accounts or recentness of baddies, and so on.

Assuming that most of your balances are at $0 now, and you have a solid mix of at least 3 active CCs, then I'd guess a gain of 20, give or take. As a general rule of thumb, for every 10% in util you drop you gain 10 points. Going from 80% to 70% won't net you 10, but going from 80% to 1% would net you over 80. Most of the points gained comes from going below 20%, closer to 0%.

[Booner72]

@llecs:  I just read that 10% gets you 10 points on an old post around here today, then I see you saying this today.  I just have to say I don't think this is true.  When I paid down my utilization from 77% to 40-ish% last month, I only got 10 points.    i just don't think it can be that simple, can it? 

OP -- I do think you will get some points for sure, tho.  And also it's great to not owe that much.

Boone

[llecs]

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@Booner72 wrote:

@llecs:  I just read that 10% gets you 10 points on an old post around here today, then I see you saying this today.  I just have to say I don't think this is true.  When I paid down my utilization from 77% to 40-ish% last month, I only got 10 points.    i just don't think it can be that simple, can it? 

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It's definitely not an exact science and it's always a YMMV thing. As mentioned in the post, most of the points would come as it approaches 1% and it is all assuming that there's a solid mix of credit and most all the cards hit $0. If you have 1 CC and drop util from 77% as an example, I cannot foresee more than 30 pts if you hit 1%. But YMMV.

Here's my personal experience on the topic going from 89% to <10%:

http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Score-impact-of-going-from-89-util-to-lt-...

ETA...going from 89% to 3% on TU FICO resulted in 91 points and 86% to 1% resulted in 125 points.

[Anonymous]

We have six credit cards totally almost $8800 of debt (with $9800 in CL). Five of these are smaller cards ($1500 cl, $750 cl, $750cl, $500cl and $300cl) and then we have one larger one from USAA with a $6000 CL. We were thinking of doing this:

1500 card paid in full.

750 card paid in full.

750 card paid in full.

500 card paid in full.

300 card paid in full.

The only card that will be reporting a balance is the USAA card. It currently has 5600 of the 6000 CL used. We'll pay it down to just under $5000. With the other cards paid off, it will allow us to do a snow-ball type thing (thank-you Dave Ramsey) and apply that $250/month to the $150 we pay to USAA already. All six cards report promptly each month. So in total we'll have five cards reporting $0 balance and 1 card that will be high but lowering each month. I know the 0% util and <10% util is ideal, and we're trying to get there but this is the best we can do right now. You can acquire debt so quickly but it is hard to get rid of it.

I haven't pulled my credit scores since March. When we pulled them then, through a mortgage company (since we're ultimately trying to buy a house), they were EQ: 627 EX: 602 TU 590 .

Aside from paying down my cards, there isn't anything else I can do to fix my credit. I have extremely high inquieries (a car dealership shopped us around) which will just take time to get rid of. I have no open collection accounts and one paid. I have been meaning to GW them to see if they will remove it, but I have my doubts. Aside from that, the only thing I can do is keep working to get util down, not get any more cards and wait. The reason I am so antsy is our dream house is on the market and it has decreased in price since March by almost $30,000. It is now listed almost $50,000 below market value. Just seems too good to let it go by without a fight.

Either way, I need to get my "middle score" which was 602 in March to a 640 so we can move forward.