Raising score quickly -- utilization rate

[llecs]

On util, I have a thread that tracked my progress for TU FICO and EQ FICO by taking CCs from 89% down to 3% and 1% respectively for TU and EQ. Increased 91 on TU and 125 on EQ with no baddies or other changes aside from balances. Util is a big deal. As we say, YMMV. It depends on your mix of credit (those results won't happen with only 1 or 2 CCs), and it depends on your scoring bucket. A good indicator is to look on your FICO reports from myFICO. If util is the #1 negative item, with balances mentioned in there too in #2-#4 slot, then you'll see greater gains. I've always told people that for every 10% you pay off, you'll gain roughly 10 points. So, roughly, going from 80% to under 10% will net you around 80. Most of those point will appear though when you clear the 30% level. You won't likely get 50 points for going from 80% to 30% as an example. You certainly won't see 10 points by going from 80% to 70%. Using 80% as an example only.

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@Anonymous wrote:

I’d say that – my own reasons for credit problems are mainly due to disorganization, not severe financial problems.   I am just bad at keeping track of things.  

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That was my case too. I'd take the bill, never open it, and toss it in a box somewhere. I never read my bills. My opinion was that they'd get their money eventually, so why worry. I know it sounds cavalier, and when I think about it today I cringe. I remember telling my creditors that if they called me one more time, I would delay their payment for a month. I showed them.    I had the money, but I was uber-disorganzied. That was the hardest thing to do when I found this site. I got denied one too many times and that forced me to either accept future denials or make a change. I had to change. I now use Excel to track each bill and each due date and update my online access and balances every other day or so. It's much easier now than before.

[rckstrscott]

I shoulda linked to that thread! I forgot all about it.. That was a great read

-scott

[GoodCredBen]

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@llecs wrote:

On util, I have a thread that tracked my progress for TU FICO and EQ FICO by taking CCs from 89% down to 3% and 1% respectively for TU and EQ. Increased 91 on TU and 125 on EQ with no baddies or other changes aside from balances. Util is a big deal. As we say, YMMV. It depends on your mix of credit (those results won't happen with only 1 or 2 CCs), and it depends on your scoring bucket. A good indicator is to look on your FICO reports from myFICO. If util is the #1 negative item, with balances mentioned in there too in #2-#4 slot, then you'll see greater gains. I've always told people that for every 10% you pay off, you'll gain roughly 10 points. So, roughly, going from 80% to under 10% will net you around 80. Most of those point will appear though when you clear the 30% level. You won't likely get 50 points for going from 80% to 30% as an example. You certainly won't see 10 points by going from 80% to 70%. Using 80% as an example only.

I am expecting the same thing, and i only have 2 CC's..... /me is a sad panda now. 

[Anonymous]

That was a great thread. 

Can I ask you how you obtained that consolidation loan?  I am assuming that reported as an installment and thus did not hurt your credit as much -- right?  I do belong to a smaller credit union... I have heard that sometimes those are easier with loans.    But I was really curious as to how you got that loan.

Thanks!

[rckstrscott]

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@BadCredBen wrote:

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@llecs wrote:

On util, I have a thread that tracked my progress for TU FICO and EQ FICO by taking CCs from 89% down to 3% and 1% respectively for TU and EQ. Increased 91 on TU and 125 on EQ with no baddies or other changes aside from balances. Util is a big deal. As we say, YMMV. It depends on your mix of credit (those results won't happen with only 1 or 2 CCs), and it depends on your scoring bucket. A good indicator is to look on your FICO reports from myFICO. If util is the #1 negative item, with balances mentioned in there too in #2-#4 slot, then you'll see greater gains. I've always told people that for every 10% you pay off, you'll gain roughly 10 points. So, roughly, going from 80% to under 10% will net you around 80. Most of those point will appear though when you clear the 30% level. You won't likely get 50 points for going from 80% to 30% as an example. You certainly won't see 10 points by going from 80% to 70%. Using 80% as an example only.

I am expecting the same thing, and i only have 2 CC's..... /me is a sad panda now. 

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don't be sad ben! You might not get 90 points but going from 79 to sub 10 with 2 cards will still give you a signifigant boost!

[llecs]

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@rckstrscott wrote:

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@BadCredBen wrote:

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@llecs wrote:

On util, I have a thread that tracked my progress for TU FICO and EQ FICO by taking CCs from 89% down to 3% and 1% respectively for TU and EQ. Increased 91 on TU and 125 on EQ with no baddies or other changes aside from balances. Util is a big deal. As we say, YMMV. It depends on your mix of credit (those results won't happen with only 1 or 2 CCs), and it depends on your scoring bucket. A good indicator is to look on your FICO reports from myFICO. If util is the #1 negative item, with balances mentioned in there too in #2-#4 slot, then you'll see greater gains. I've always told people that for every 10% you pay off, you'll gain roughly 10 points. So, roughly, going from 80% to under 10% will net you around 80. Most of those point will appear though when you clear the 30% level. You won't likely get 50 points for going from 80% to 30% as an example. You certainly won't see 10 points by going from 80% to 70%. Using 80% as an example only.

I am expecting the same thing, and i only have 2 CC's..... /me is a sad panda now. 

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don't be sad ben! You might not get 90 points but going from 79 to sub 10 with 2 cards will still give you a signifigant boost!

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DITTO.

[GoodCredBen]

okies! thanks!

[llecs]

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@Anonymous wrote:

That was a great thread. 

Can I ask you how you obtained that consolidation loan?  I am assuming that reported as an installment and thus did not hurt your credit as much -- right?  I do belong to a smaller credit union... I have heard that sometimes those are easier with loans.    But I was really curious as to how you got that loan.

Thanks!

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I applied for it via Lending Club. Like with any lender, they'll look at score, DTI, income, etc. It is reported as an installment. Revolving utilization plays a huge part in FICO scoring. In contrast, installment is only a very tiny part and its utilization is separate. Some posters in here have posted they tried for an installment but a line of credit was sold to them instead. LOCs are scored like CCs in most cases, and that won't eliminate util because the debt is reshuffled. Keep an eye out for that if you were to apply.

[Anonymous]

That actually raises another issue --

My ex and I bought a place years ago and used a HELOC on a piggyback.  The HELOC was interest only for 10 years.   We have stayed current, but the balance has stayed the same -- so the utilization rate is 100% on this.   Would even paying down the credit cards help that much when this HELOC represents a huge part of my overall revolving?  Even if I get the cards down to $0, with this HELOC, my overall utilization would be 85%.   I am reluctant to pay anything towards the HELOC because it's underwater and we just rent it now. 

I guess I have been focused on my credit cards because before I started using those more, my credit score was fine.   

[llecs]

FICO scores a HELOC or LOC as an installment at some point based on the limit of that HELOC or LOC. I'd have to look up the limits, but I think it's $30k+ and does vary between the three CRAs. What's the limit on that HELOC?