Even with lots of baddies, score should increase under 30% utilization, right?

[Anonymous]

I have two judgments and lots of baddies, which I'm working on. I paid my credit cards down to under 30% utilization last week. This should raise my score a good bit, right, even though I have several baddies and two judgments? How many points do you think I can expect, or does it just depend?

[Anonymous]

I think it just depends. I only get small jumps 2 pts here 5 pts there but fiancée just got a 77 pt jump just by ulitization going to 31% he has 3 baddies. 

[Anonymous]

Thank you.

I forgot to add that I got a $300 increase on one of my credit cards las week, so that coupled with going from 44% utilization to under 30% hopefully will give me at least 20 points on each score.  I'm very eager to see my next credit report update.

[Kutuzov]

I had have up to 5 collections and 5 CO in the past. With a 10-20 util my score jumped 5-20 pts max. As those aged and some where removed my score started to improve. The real jump reaching 650+ was when I got my first cl up to 5k. Since 2012 with a score of 520 then, and those baddies, my score now with 3 CO, 1 settled CO, and one collection is now 650.

Remember you also get penalized for the volume of judgments/collections. But anything could happen those Fico algorithms are a bit crooked, and really is a debtor score not a credit score!

[Anonymous]

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@Anonymous wrote:

Thank you.

I forgot to add that I got a $300 increase on one of my credit cards las week, so that coupled with going from 44% utilization to under 30% hopefully will give me at least 20 points on each score.  I'm very eager to see my next credit report update.

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This turns out to be really key to anyone even guessing an answer.  Do you see why?  In your original post you said that you were going down to under 30% but didn't indicate where you were coming from.  It's like saying: "I just got a raise to making $50k a year -- do you think it will be a lot easier to pay the rent?"  Well, if your raise was from 47k to 50k, no -- probably not going to be that much easier.  But if it was from 30k to 50k, then for sure.

If you were going from 80% to 29% you'd see a big jump.  I am doubtful that you will see that much benefit, given where you are going from, though you should see some. 

Here is something to think about, though.  Until you are able to pay your cards down to 1%, then you shouldn't be thinking about credit scores.  You should be thinking about how you can get out from under the debt.  High credit scores are tools for enabling yourself to increase your debt -- to get lenders to give you money or big credit cards.  But right now you should not be looking for ways of increasing your debt, but eliminating it. 

Work on getting to a place where you have paid off all your CC debt.  As you go down from 28% to 18% to 8% you can watch your scores, as a sideline.  But the real reward for having no CC debt is so that you can begin saving money, not for the grail of a big score.

Hope that helps and makes some sense.  Very best wishes...

[NRB525]

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@Anonymous wrote:

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@Anonymous wrote:

Thank you.

I forgot to add that I got a $300 increase on one of my credit cards las week, so that coupled with going from 44% utilization to under 30% hopefully will give me at least 20 points on each score.  I'm very eager to see my next credit report update.

---

This turns out to be really key to anyone even guessing an answer.  Do you see why?  In your original post you said that you were going down to under 30% but didn't indicate where you were coming from.  It's like saying: "I just got a raise to making $50k a year -- do you think it will be a lot easier to pay the rent?"  Well, if your raise was from 47k to 50k, no -- probably not going to be that much easier.  But if it was from 30k to 50k, then for sure.

If you were going from 80% to 29% you'd see a big jump.  I am doubtful that you will see that much benefit, given where you are going from, though you should see some. 

Here is something to think about, though.  Until you are able to pay your cards down to 1%, then you shouldn't be thinking about credit scores.  You should be thinking about how you can get out from under the debt.  High credit scores are tools for enabling yourself to increase your debt -- to get lenders to give you money or big credit cards.  But right now you should not be looking for ways of increasing your debt, but eliminating it. 

Work on getting to a place where you have paid off all your CC debt.  As you go down from 28% to 18% to 8% you can watch your scores, as a sideline.  But the real reward for having no CC debt is so that you can begin saving money, not for the grail of a big score.

Hope that helps and makes some sense.  Very best wishes...

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Yes, understanding where utilization is going is an important bit of information to reveal early on. There are a number of other bits to request of the OP, however:

1) What is the total debt?

2) What are the limits on each CC?

     2a) If the credit cards are each at $300 limits, nothing has more capacity than this, then the discussion would go in an entirely different track regarding both the wisdom of paying down utilization, and how the credit is being used.

     2b) If the OP has on the order of $10k of outstanding debt, then yes the focus should be on reducing debt amounts, but also a new tack emerges; is there any way to reduce interest expense to help this along?

3) What credit cards does the OP have? This raises possibilities depending on the specific card, or concerns if cards such as First Premier or Credit One are involved.

4) Lastly, what is the expected time horizon to remove the baddies, since Utilization is nice because it can give a few points but the real ogre in the room is the baddies.

[Anonymous]

Great points all by NRB525.

When NRB points out that the total debt in dollar value may be small (equivalent to asking what the credit limits are) he's right.  That's why I said "until you are able to pay your cards down to 1%...."  If the OP is able to pay his cards down to where they report at 1%, then it's a slam dunk: pay off the cards, charge something small on one card, and then watch and see what score benefit he gets.  Empirically testing a question is always better then speculating with strangers -- if it is easy to do.

But the general shape of the original post made me doubt that he was able to do it right now.  When a person is eager to pay down his debt for a scoring benefit, and all he can achieve right now is a reduction from 44% to 30%, that suggests that his total debt is big enough that he simply can't pay it off by just pinging his checking account.  That's why I said his principal focus should be debt reduction -- not  reducing the debt so that my credit score can get higher but reducing the debt so that he can stop being trapped in it, and in particular so he can begin saving money -- for a rainy day fund, for retirement, etc.

NRB raises some good points about how he can best do that: certain kinds of cards might be charging him huge fees or interest (etc.) and thus maybe they should be tackled first.

And I agree with both the OP and NRB that he should be in a parallel track investigating what strategies he can employ to reduce the derogs.  Most especially I would recommend a careful look at how they happened in the first place.  For example, with late payments, did some of them occur because he forgot to pay on time?  If so, he should adopt strategies to prevent that from happening in the future (e.g autopay, etc.).

[Anonymous]

my scores increased significantly from both removing (my first step) and then decreasing util from 140% to 90% to 35% to 18% to 1%. both have been significant I can't tell which holds more weight.

[Anonymous]

Hey Siren.  Congrats on lowering your CC debt from stratospheric levels to paying it all off!  That probably took a lot of work.  Good for you, pal.

Early removal of derogs is a great thing to explore, and man is it awesome any time it can happen.  But it belongs to a category of strategies that puts you at the mercy of choices that OTHER people make: collection agencies, original creditors, etc.  (Unless the negative data are false, they don't have to do it.)  So while early removal is worth looking into (for sure) even better are strategies that involve choices that are far more within your control: planning a budget, controlling spending, paying down debt, identifying how derogs got there in the first place and implementing prevention tools, controlling the urge to open more cards, etc.

[Anonymous]

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@Anonymous wrote:

Great points all by NRB525.

When NRB points out that the total debt in dollar value may be small (equivalent to asking what the credit limits are) he's right.  That's why I said "until you are able to pay your cards down to 1%...."  If the OP is able to pay his cards down to where they report at 1%, then it's a slam dunk: pay off the cards, charge something small on one card, and then watch and see what score benefit he gets.  Empirically testing a question is always better then speculating with strangers -- if it is easy to do.

But the general shape of the original post made me doubt that he was able to do it right now.  When a person is eager to pay down his debt for a scoring benefit, and all he can achieve right now is a reduction from 44% to 30%, that suggests that his total debt is big enough that he simply can't pay it off by just pinging his checking account.  That's why I said his principal focus should be debt reduction -- not  reducing the debt so that my credit score can get higher but reducing the debt so that he can stop being trapped in it, and in particular so he can begin saving money -- for a rainy day fund, for retirement, etc.

NRB raises some good points about how he can best do that: certain kinds of cards might be charging him huge fees or interest (etc.) and thus maybe they should be tackled first.

And I agree with both the OP and NRB that he should be in a parallel track investigating what strategies he can employ to reduce the derogs.  Most especially I would recommend a careful look at how they happened in the first place.  For example, with late payments, did some of them occur because he forgot to pay on time?  If so, he should adopt strategies to prevent that from happening in the future (e.g autopay, etc.).

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I'm not trapped under high debt. I owe less than $300 dollars total on my credit cards. So not a big debt at all.  I would have been able to pay it down more quickly, but I'm saving for dental work, which will be paid for in cash. The credit cards will be paid off before the end of the year.

I'm rebuilding my credit, so every little jump in my credit score is exciting for me. I will continue to be excited and happy for every little increase, and every time a negative falls off..  At the beginning of the year, my scores were in the low 500's. I've raised them over 100 points since that time. I got several medical debts off my credit report earlier this year. I just got an increase in credit limit that I didn't ask for. Since my credit is improving, I think my focus was and is on the right thing.