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Tis the season and all that, but I finally got my Christmas bonus this week at work and I can finally pay off ALL my credit cards in full Monday afternoon. Just Wednesday I got an alert that one of my cards was over the limit and it dropped my score 12 points. This isn't something that stays on my credit is it? I can simply pay this off and it will drop my utilization causing my scores to go BACK up and all will be well, right?
THANKS!!!!
@pritchardhallhokie wrote:Tis the season and all that, but I finally got my Christmas bonus this week at work and I can finally pay off ALL my credit cards in full Monday afternoon. Just Wednesday I got an alert that one of my cards was over the limit and it dropped my score 12 points. This isn't something that stays on my credit is it? I can simply pay this off and it will drop my utilization causing my scores to go BACK up and all will be well, right?
The pain is coming from your utilization. Over-the-limit means that card is at great than 100% utilization. Fortunately, FICO has no memory of past utilization percentages, so once you pay down, and your new balances reflect on your credit reports after the statements drop, you'll be just fine again. However, "high balance" can certainly be reported on your credit report, showing that you've been over-the-limit. The good news is that it may only ever matter, as a past anomaly, upon manual review of credit.
I agree that FICO recovery of your scoring in % util can be attained by paying it down in later months since % util as it relates to FICO scoring has no historical memory.
My concern would not be so much with FICO scoring as with future internal review of your account by the OC, They retain their own account history records, and do periodic reviews on their own. Goiing over the limit is a red flag, and might have affect on their future decisions on your account, such as credit limit adjustments.
Going over the limit, on most CC agreements, is a violation of ;payment terms, and could invalidate, for example, any low-interest, iintroductory or balance transfer rates now in effect.
Getting it paid down now, and keeping it down, may be more imortant in the long run than this and next month's FICO impact.