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Regular Contributor
Posts: 181
Registered: ‎01-29-2011
0

Paying off in large lump sum vs. paying large monthly payments...

I have read on another website that it is a good idea to pay your credit card off in maybe 3 or 4 large lump sums. It said it willhelp your score icrease since there are ther eis positive payment history and FICO sees that over time....could this be true? I'm just trying figure out the best way so I can really get my score to increase over the nxt 4 months or so.

Credit card balances are below?

 

1000 limit       balang 980

400 limit         balance 415

300 limit         balance 240

500 limit         balance 800

 

I will be making large payments in 4 more days!

 

 


Starting Score: 520
Current Score: 627
Goal Score: 700


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Moderator Emeritus
Posts: 4,470
Registered: ‎12-31-2008
0

Re: Paying off in large lump sum vs. paying large monthly payments...

You are likely to see the highest FICO score increase by paying 3 cards down to zero; with the fourth account reporting a 9% or less balance.  Doing that the first month, and each succeeding month will likely be the most effective strategy for FICO scores.

 

Of course, it is a high priority to pay off the two cards that are reporting over the limit.  The sooner the better.  (Are these cards open or closed?)

 

No need to drag it out as far as FICO's concerned.

Just puttin' syrup on something, don't make it pancakes.
Regular Contributor
Posts: 181
Registered: ‎01-29-2011
0

Re: Paying off in large lump sum vs. paying large monthly payments...

The 500 limit card s closed, but BofA said they willopen it back up-not sure how true that is, and the 400 limit card is open. I have been current with that 400 limit card for the last year or so, I forgot to opt out.

 

I will be paying these off and I can't wait. Any idea which card I should leave a small balance on? Or does it even matter??

 

Do you have idea of what kind of increase I might see in my score or how soon? I'm sure it wont go that high but I really just want to start making some changes.


Starting Score: 520
Current Score: 627
Goal Score: 700


Take the FICO Fitness Challenge

Moderator Emeritus
Posts: 4,470
Registered: ‎12-31-2008
0

Re: Paying off in large lump sum vs. paying large monthly payments...

All other things being equal, I would report a small balance on the cc with the highest CL.  That would give you the lowest utilization.

 

If on the other hand, some are store cards and some are bank cards, I would report a small balance on the bank card.

 

You're shooting for less than 9% on whichever card you report a balance on.

 

Keep us posted on your score impact!  And congrats on your payoff - that is P-R-I-M-O!

Just puttin' syrup on something, don't make it pancakes.
Epic Contributor
Posts: 20,645
Registered: ‎03-19-2007
0

Re: Paying off in large lump sum vs. paying large monthly payments...

FICO scores payment history in terms of derogs and delinquencies, not in terms of how much or when you pay debt.

FICO scoring of revolving % util has no historical memory.  Where you end up is the util that they score.

Once paid, the FICO result will be the same.

 

 

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