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Decreasing Utilization

Decreasing Utilization

Hi all--I was wondering if any of you guys could share any experiences you have had when paying down credit cards and how it affects scores. I am waiting for my credit reports to update my new utilization. It is going from 59% to 38%. What kind of increase should I expect on that alone? I am working with a mortgage company and the LO told me that to get a better rate my mid score should be 640 and I am 3 points away (EQ). 

 

Thanks.

Message 1 of 6
5 REPLIES
Moderator Emeritus

Re: Decreasing Utilization

I'd guess 5-15 with more points reappearing on EQ vs TU. I would also guess a 20-30 increase if it dropped below 30%. All of this is assuming that the util is correct, that there aren't other accounts factored into util like CC COs, is assuming you have a good mix of credit (e.g. 3 or more CCs), and is assuming that util is listed as one of the top negative scoring reasons.

 

IME, I paid down util from 89% to 1% in one month and saw a 125 increase on EQ and 75ish on TU. I pulled my FICOs frequently during that time period and tracked the changes. I found most of my bumps came in when it hit below 30% and when more CCs hit a zero balance.

Message 2 of 6

Re: Decreasing Utilization

Thanks, llecs!!Utilization is listed as one of the top negative reasons. I sure hope that I do get between 10-15 points. I will post my new score as soon as the account reports the zero balance and the CLI of $400. 

Message 3 of 6
Moderator Emeritus

Re: Decreasing Utilization

Decreasing revolving util is one of the fastest and easiest way to give your score a boost.  Most have found that having one CC report with a util of  9% and under has given max results.

Starting Score: 504
July 2013 score:
EQ FICO 819, TU08 778, EX "806 lender pull 07/26/2013
Goal Score: All Scores 760+, Newest goal 800+
Take the myFICO Fitness Challenge

Current scores after adding $81K in CLs and 2 new cars since July 2013
EQ:809 TU 777 EX 790 Now it's just garden time!

June 2017 update: All scores over 820, just pure gardening now.
Message 4 of 6
Member

Re: Decreasing Utilization

Great to know I'm at 96% with my credit card utilization & hope to be at 10% or Lower by the end of the month.
Message 5 of 6

Re: Decreasing Utilization

UPDATE: Received notification today from Equifax that my score had changed. It went up 10 points by decreasing utilization from 59% to 39%. I am happy. I needed to be over 640 and this did it. Thanks for all the replies.Smiley Happy

Message 6 of 6