Should I expect another increase in my scores?

[Anonymous]

My husband and I recently went through a very, very bad patch. We fell behind (30, 60, 90) days late and out scores went down. Mine to mid-500's (most of the revolving credit was in my name) and his to high 500's.

In July 2008 we paid off the majority of all our balances, including the entirity of our 17K car loan. We went from $40,000 of debt to $800 and should have that paid off by the end of this month.

I just checked our scores. My Experian is 598, my husband's is 642. My transunion is 570 (ugh). Should i expect these scores to keep going up? Should i pay off the remaining balances in one chunk or make timely payments for a few years (the balances left our on cards that are closed but that we both had for over a decade, they were closed by the credit company--as I said, bad patch).

And what is up with Transunion being so much lower??

[Candice]

My suggestion would be to pay down so you have a low UTIL and then go with a rebuilder card to re-establish good payment history. B of A is a great secured rebuilder.

Also try GWs (search if you are unfamiliar w/ the term) to help with lates.

[Anonymous]

Maybe I wasn't clear we have paid down, I do understand how to rebuild my credit, my question was in fact specifically pointed towards something different. So I'll try to rephrase:

Having paid down our debt, and seeing a jump in our scores, can we expect to see our scores continue to go up, as a continued reaction to our paying off 98% of all of our debt, revolving and installment? Or is this first jump, the one we see now, two months later, the one and only increase we should expect to see if ALL THINGS REMAIN CONSTANT.

A secondary and corollary question was: on accounts that are already closed, but have a small ($75-$200) balance left on them, is it better to make many small payments over several months to show good payment, or simply pay them off? We have had these accounts for a long time, but since they are already closed I do not know which option stated above is better.

So, if anyone can actually answer my question? That'd be great.

[treski]

She was right about suggesting GW in that she is suggesting you get rid of your bad accounts/lates.  If I had balances on accounts closed by the creditor, I'd offer a PFD.  That's your best bet ... as it will hopefully encourage them to delete your account.  I'm not sure what to do if the account is a long-standing credit line of yours, but it was closed by the creditor and that's certainly awful.

With the bads mostly on your side, you will need time if you can't remove them.  You will need low utilization.  If a creditor has closed a credit line, then you have lost that available credit and it could hit your utilization hard.  I believe that's why Candice suggested new cards.

"IF ALL THINGS REMAIN CONSTANT" then sure they can improve with time, but it's not very productive on your part.  And if you leave the accounts closed by creditors with balances on them without being proactive, you could see some new collections.

Very bad.

Message Edited by treski on 09-07-2008 06:01 AM

[Anonymous]

All righty, I'll simplify again.

Here is my question: in a vacuum, with all things being constant, will a credit report, after a significant pay off, take more than two months to reflect that change in its score? If it does, how long does it take?

Please do not worry about paying over time or paying off all at once, I'm sorry I asked it seemed to muddy the waters--everyone seemed to read it as not paying at all. Teach me to try a multi pronged question! I'm well aware that I should pay them, and these accounts were closed by me when I reached pay-off agreements with the company. Not by them.

Message Edited by daijobu16 on 09-07-2008 06:41 AM

Message Edited by daijobu16 on 09-07-2008 06:41 AM

[Anonymous]

No, you will not continue to get more points for this. Once you pay off your debt and it is reported, you get those points as soon as they report. If tomorrow you charged up $10k more, once it reported, your score would immediately reflect that damage from that. If you paid it the next month in full again, once it reported, it would immediately reflect in your score. Utilization is reflected in real time (once balances are reported, of course). You do not continue to get brownie points or anything for keeping the balances at $0 month after month, etc.  However, you accounts will continue to age and you main gain a few points over time for history and overall age of your accounts.

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daijobu16 wrote:
All righty, I'll simplify again.

Here is my question: in a vacuum, with all things being constant, will a credit report, after a significant pay off, take more than two months to reflect that change in its score? If it does, how long does it take?

Please do not worry about paying over time or paying off all at once, I'm sorry I asked it seemed to muddy the waters--everyone seemed to read it as not paying at all. Teach me to try a multi pronged question! I'm well aware that I should pay them, and these accounts were closed by me when I reached pay-off agreements with the company. Not by them.

Message Edited by daijobu16 on 09-07-2008 06:41 AM

Message Edited by daijobu16 on 09-07-2008 06:41 AM

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[Anonymous]

thank you!

[Anonymous]

You will get points each month you go without being late-

Keep paying on-time

Keep the balances low

Keep sending GW letters

You will see 3 to 10 points every month until you go 1 year clean

You should see a bigger boost when you hit 2 years clean.

You got the immediate score boost from paying down the balances-