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Valued Member
michintom
Posts: 37
Registered: ‎01-11-2013
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Credit Cards now paid off.

Hello,

 

I finally paid off my credit cards.  I currently have two, Capital one ($300) Amazon Store Card ($2000).  My FICO started at 660 and now I'm at 684 as of today.

I searched around the forums and can't find the right information.  Since my credit cards are now fully paid off, would it be better for me to use 9% of each card and pay it in full again? or don't use the cards at all?

 

Thanks in advance! :smileyhappy:


Starting Score: 660
Current Score: 691
Goal Score: 850


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Regular Contributor
bobebob
Posts: 244
Registered: ‎08-14-2011
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Re: Credit Cards now paid off.


michintom wrote:

Hello,

 

I finally paid off my credit cards.  I currently have two, Capital one ($300) Amazon Store Card ($2000).  My FICO started at 660 and now I'm at 684 as of today.

I searched around the forums and can't find the right information.  Since my credit cards are now fully paid off, would it be better for me to use 9% of each card and pay it in full again? or don't use the cards at all?

 

Thanks in advance! :smileyhappy:



The general consensus is to keep utilization anywhere between 0 and 10% (some say <4% for best results).  But is best to show some use.

 

If you want to use it for some of your normal budget expenses (I.E. things you know that you have the money to pay off at the end of the month) you can use it for those things putting more $$ through the card each month.  This might increase the likely hood of being approved for increased credit limits. (although with Crapone, I understand that isn't always the case)  Increased CL's over time will lower your util which will help your score.

 

To keep your utilization below 10% you would have to make one or more pre-statement payments to keep the util low.  Only the balance reported on your statement is counted towards your util.  You can use the card up to but not over the limit mid-statement without injuring you FICO score.

 

 

bobebob || June: My FICO SW EQ(Upgraded Version) = 821 ||June: Walmart TU Fico=834Goal = FICO's>800 || In my wallet: CostcoAmEx(20k), DCU Visa Platinum (10k), BoA Visa Signature (17.1k), Walmart Discover (7.5k), AmEx Corporate (5k). All PIF every month.
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Robertwd82
Posts: 71
Registered: ‎11-19-2012
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Re: Credit Cards now paid off.

Let the statement report 1-9% on one card, and the other(s) at 0 balance. You can pay in full after the statement cuts if you don't want to pay interest on the 1-9%. 

 

You can use them as much as you want but before the statement cuts pay it down to 0 and 1-9%

Valued Member
michintom
Posts: 37
Registered: ‎01-11-2013
0

Re: Credit Cards now paid off.

Thank you both for the replies.

I'll go ahead and use both cards from 0~10% and pay if off again. :smileyhappy:


Starting Score: 660
Current Score: 691
Goal Score: 850


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Regular Contributor
bobebob
Posts: 244
Registered: ‎08-14-2011
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Re: Credit Cards now paid off.

[ Edited ]

michintom wrote:

Thank you both for the replies.

I'll go ahead and use both cards from 0~10% and pay if off again. :smileyhappy:


One thing that I didn't mention that Robert did above is that if you only have a balance report on ONE of your cards it will be a little better than having a balnce report on both of them.  This is true even if your overall and individual util is less than 10%.  Apparently, the score increases your percieved risk if you owe money to more than one unsecured CC at a time.  They probably don't think we can walk and chew gum at the same time either. :smileyhappy:

 

It won't crater your score or anything if you don't do this, but if you want to absolutely maximize your potential score, you should only have one card reporting a balance each month (and keep util<10%).  You can use the other cards, just pay them completely off before the statement posts.

 

It's not something I do all the time.  But if I was borderline close to a higher credit score that would let me get a better deal on a loan I would start doing this a month or so before I was planning to apply for said loan to bump up my score.  Doing it all the time isn't really worth it.

bobebob || June: My FICO SW EQ(Upgraded Version) = 821 ||June: Walmart TU Fico=834Goal = FICO's>800 || In my wallet: CostcoAmEx(20k), DCU Visa Platinum (10k), BoA Visa Signature (17.1k), Walmart Discover (7.5k), AmEx Corporate (5k). All PIF every month.
Valued Member
michintom
Posts: 37
Registered: ‎01-11-2013
0

Re: Credit Cards now paid off.

Oh no. I just spent $180 on my amazon card (9%) and $8 on my capital one (3%). Guess I need to pay off my cc asap. Since you mentioned the better loan deal, I'm actually trying to get myself to 720 for tier 1 auto loan. Other than paying off both my cards before the statement date, what would be a faster way?

Thanks again :smileyhappy:

Starting Score: 660
Current Score: 691
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Established Member
LMBray09
Posts: 19
Registered: ‎02-02-2013
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Re: Credit Cards now paid off.

Congrats! I just paid off all my credit cards too and hopefully get the utilization correct!

 

If you dont mind me asking, how long did it take to show on your score that you paid off your cards? Both of the cards as of yesterday showed their 0 balances on their respectful websites and I think one statement date is for today and the other cards statement date is for the 25th. But Scorewatch hasn't alerted me of any change yet. Just curious :smileyhappy:

Starting Score: FICO EQ 663 (02/04/13)
Current Score: FICO EQ 687
Goal Score: FICO EQ 700 (March 2013)
Valued Contributor
p-
Posts: 2,612
Registered: ‎06-05-2008
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Re: Credit Cards now paid off.


michintom wrote:
Oh no. I just spent $180 on my amazon card (9%) and $8 on my capital one (3%). Guess I need to pay off my cc asap. Since you mentioned the better loan deal, I'm actually trying to get myself to 720 for tier 1 auto loan. Other than paying off both my cards before the statement date, what would be a faster way?

Thanks again :smileyhappy:

It only matters when you are going to apply for credit.  Your scor will fluctuate month to month depending on statement balances and utilization.  Plan ahead for apps, and two months before any app tweak your balances so you are at 3% util, and make sure all but one post 0 balance at statement time.  This will get you the best possible score.

 

Also, once you've had the cap1 for a year, hit them up for a CLI.  

  8-12-14: FICO EXP: 797 - EQU: 734 - TRAN: 739 - AVG: 757 - +207 points from JUN 2008 - MY CREDIT JOURNAL

Valued Contributor
p-
Posts: 2,612
Registered: ‎06-05-2008
0

Re: Credit Cards now paid off.

michintom wrote:
Other than paying off both my cards before the statement date, what would be a faster way?

Only the statement balance matters.  You can run it up to 90% between statements and it won't show up on your report unless the statement cuts before you pay it.

  8-12-14: FICO EXP: 797 - EQU: 734 - TRAN: 739 - AVG: 757 - +207 points from JUN 2008 - MY CREDIT JOURNAL

Valued Member
michintom
Posts: 37
Registered: ‎01-11-2013
0

Re: Credit Cards now paid off.


LMBray09 wrote:

Congrats! I just paid off all my credit cards too and hopefully get the utilization correct!

 

If you dont mind me asking, how long did it take to show on your score that you paid off your cards? Both of the cards as of yesterday showed their 0 balances on their respectful websites and I think one statement date is for today and the other cards statement date is for the 25th. But Scorewatch hasn't alerted me of any change yet. Just curious :smileyhappy:


Thank you.  It took about a week for me to get the score updated.  :smileyhappy:


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Current Score: 691
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