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New Member
smithdavies
Posts: 8
Registered: ‎01-27-2013
0

FICO scores before/after credit card pay-down?

I see quite a lot of discussion about how big of an impact revolving debt utilization effects FICO scores.  I understand that situations are different but I have not seen many statements from about what their FICO scores were before/after credit cards were paid down (or charged up, for that matter). 

 

I'm simply curious what type of effect utilization CAN have, not necessarily what it will have in my case. 

 

If there is a thread discussing this around here please point me to it.  I plan to experiment with different utilizations to see what type of effect it has and would be glad to add my findings to the mix. 

 

SmithD

 

New Member
smithdavies
Posts: 8
Registered: ‎01-27-2013
0

Re: FICO scores before/after credit card pay-down?

Funny thing.  After searching and reading around 20-30 posts across multiple forums, I make this post and then see the question about a "40pt drop" in this forum and find it may/could have been due to utliization.  Either way, I'd like to see what different mileages people have realized. 

 

Moderator Emeritus
llecs
Posts: 32,881
Registered: ‎08-04-2007
0

Re: FICO scores before/after credit card pay-down?

Here's my play by play experience on a clean report, tracking FICOs when paying down util from 89% to 1%:

 

http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Score-impact-of-going-from-89-util-to-lt-...

 

There's another poster in here names "psychic" and he did some util experiments in the single digits (0% to 9%) and his summaries were interesting.

Regular Contributor
axxy
Posts: 135
Registered: ‎10-11-2007
0

Re: FICO scores before/after credit card pay-down?

If your scores are low, and you pay down balances to try to get higher scores, your efforts will often be frustrated by the credit card companies lowering your limits to follow your balances downward, thereby keeping your utilization percentage the same or higher.

 

Valued Contributor
Gunnar419
Posts: 1,158
Registered: ‎01-23-2013
0

Re: FICO scores before/after credit card pay-down?


axxy wrote:

If your scores are low, and you pay down balances to try to get higher scores, your efforts will often be frustrated by the credit card companies lowering your limits to follow your balances downward, thereby keeping your utilization percentage the same or higher.

 


Are many companies still doing that? I knew it happened a lot during the credit crunch, but I thought it was happening much less now.

 

Valued Contributor
Gunnar419
Posts: 1,158
Registered: ‎01-23-2013
0

Re: FICO scores before/after credit card pay-down?

Small but recent example from MyFico EQ: Util 32%, score 743. Util 8% (and with some new inquiries and a reduced AAoA), score 769.

 

Valued Member
chally
Posts: 49
Registered: ‎12-15-2011
0

Re: FICO scores before/after credit card pay-down?

[ Edited ]

01/31/12 EQ utilization at 07% = 690 FICO

05/27/12 EQ utilization at 87% = 669 FICO

06/25/12 EQ utilization at 03% = 695 FICO

 

EX08... 675 (12-2013)
EQ04....704 (12-2013)
TU98.....721 (10-2013)

Sears Citi $3.6k - GE/Care Credit $1.5k - Amex BCE AU $5k
Established Contributor
foofighter74
Posts: 828
Registered: ‎12-09-2012
0

Re: FICO scores before/after credit card pay-down?

[ Edited ]

My wife's utilization dropped from about 85% to around 35% within a couple months, and her Equifax score went up 38 points. 

 

There were two separate mortgage inquiries during this time frame as well, so I'm assuing it would have gone up a bit more had those not occurred.

New Contributor
remethy
Posts: 51
Registered: ‎02-15-2013
0

Re: FICO scores before/after credit card pay-down?

my big fear about paying down my balances is that they will do what someone said above - lower the limits as I pay them off and then close them.

 

I have 2 cards which are nearly maxed out, and  have been for a couple years.  I will have a bump in my income in July and will be in a position to pay them off entirely, but was worried about this happening.  Does anyone think it would help if I paid them off in large chunks but not all at once?  Like pay 3-4 times the minimum for several months and pay them off that way, hopefully to reassure the creditor that I'm no longer overextended?


Starting Score: EQ 539
Current Score: EQ 648, TU 617, EXP 623
Goal Score: 700 by 2/2014


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