Reply
Valued Member
Siobhanmairead
Posts: 26
Registered: ‎07-26-2012
0

Paying down CC balances.....how much does it help?

I have a question about how credit card balances work on your credit report.

 

If for instance, someone had nearly maxed out all of their CC's and then paid them all down under 30% utilization would their scores go up the same amount as if they paid them down slowly? Is it a progressive score increase or can the turn around really be overnight if for instance the CC's went from 90% utilization to 8%?

 

Also, If you have 5 CC's at 90% utilization but your overall utilization is 4% is the maxed out cards hurting your credit that much if your total util is very low?

 

Thanks


Starting Score: 600
Current Score: 663
Goal Score: 720


Take the myFICO Fitness Challenge
Super Contributor
enharu
Posts: 7,002
Registered: ‎02-27-2013
0

Re: Paying down CC balances.....how much does it help?

it can be turned around once the new balances are updated with the CRAs.

 

if you have 5 CCs that are almost maxed out, it will affect your scores by quite a bit, even if overall util is low.

Also, I would be worrying more about FR from the lenders more than about the score, if I have 5 maxed out cards

JPMorgan Palladium (100k), AmEx Platinum (NPSL), AmEx SPG (46k), AmEx BCP (42k), Chase Sapphire Preferred (47k), Citi Prestige (31k), Citi Thank You Preferred (27k), Citi Executive AAdvantage (25k), JPMorgan Ritz-Carlton (21k), Merrill+ (15k), US Bank Cash+ (22.5k), Wells Fargo (12k), Bloomingdale’s (12.4k), Chase Freedom (5k), Discover IT (5k).
Frequent Contributor
Stralem
Posts: 456
Registered: ‎10-08-2011
0

Re: Paying down CC balances.....how much does it help?

Hi, new member.

 

For what it's worth, I paid down a Barclay's card from 90% util to <20% util, then called customer service to have them do an out-of-cycle update to my credit reports.

 

When I checked my scores two days layer, I found that my TransUnion FAKO had jumped 30 points.

 

I paid down two CapitalOne cards to 33% (down from 99%) and 9% (from 100%) util respectively soon after. I'm still waiting for CapitalOne to update my reports, but from what various score simulations have told me, I should see an even more dramatic jump.

 

But of course, YMMV.

財布に入っているカード
      
なかなかいいコレクションだよな~
Moderator
09Lexie
Posts: 25,960
Registered: ‎09-13-2012
0

Re: Paying down CC balances.....how much does it help?

[ Edited ]
Established Contributor
ktl72455
Posts: 831
Registered: ‎12-09-2012
0

Re: Paying down CC balances.....how much does it help?

Also be advised that the CC company can drop your CL after you pay it down so you are barely ahead. Not always, but it happens. Just a FYI!

12/4/12 TU 589 MyFico ~EQ 579 MyFico ~EX 577(Fako)
1/15/14 TU 665 | EQ 648 | EX 655 ~Myfico scores
6/8/14 TU08 666 | EQ08 656 |EX08 655 } EQ04
My Wallet: Cap1 3,500K ~FH 950 Credit One 1000~Orchard Bank 2000~ Matrix 400 ~NFCU nRewards 18K~NFCU Cash Rewards signature| 5K
Last Negs to fall off: 2-Cap1 CO's PD (fall off 1/17)~Forclosure (fall off 1/16)
Regular Contributor
Settemio
Posts: 222
Registered: ‎01-08-2011
0

Re: Paying down CC balances.....how much does it help?

I went from 85% util to under 5% and my scores went up 80 pts.

 


Siobhanmairead wrote:

I have a question about how credit card balances work on your credit report.

 

If for instance, someone had nearly maxed out all of their CC's and then paid them all down under 30% utilization would their scores go up the same amount as if they paid them down slowly? Is it a progressive score increase or can the turn around really be overnight if for instance the CC's went from 90% utilization to 8%?

 

Also, If you have 5 CC's at 90% utilization but your overall utilization is 4% is the maxed out cards hurting your credit that much if your total util is very low?

 

Thanks


 

New Contributor
knightlynews
Posts: 81
Registered: ‎01-29-2013
0

Re: Paying down CC balances.....how much does it help?

Hey Settemio, Was that one card you paid down or several to get that 80 pt increase?

Starting Score: 548
Current Score: EX686EQ682,TU???
Goal Score: 760


Take the myFICO Fitness Challenge

New Visitor
rajirog
Posts: 1
Registered: ‎04-14-2013
0

Re: Paying down CC balances.....how much does it help?

80 points increase?

 

Back in Nov 2012 i had a revolving ratio of 51%. My FIco was 664

 

Last month I bit the bullet and paid off ALL my balances $11,000 worth.  My score only went up 16 points. 

 

My score now sits at 688. I had a couple of score increases since nov 2012 before i paid everything off. 

 

I did open a a few new credit card accounts in septermber last year, right after I purchased my home so i think the new credt is hurting me at the moment. 

 

I really want to break into the 700's, but i have nothing to pay down so i guess it's just a waiting game now?

Moderator
guiness56
Posts: 22,408
Registered: ‎01-17-2008
0

Re: Paying down CC balances.....how much does it help?


rajirog wrote:

80 points increase?

 

Back in Nov 2012 i had a revolving ratio of 51%. My FIco was 664

 

Last month I bit the bullet and paid off ALL my balances $11,000 worth.  My score only went up 16 points. 

 

My score now sits at 688. I had a couple of score increases since nov 2012 before i paid everything off. 

 

I did open a a few new credit card accounts in septermber last year, right after I purchased my home so i think the new credt is hurting me at the moment. 

 

I really want to break into the 700's, but i have nothing to pay down so i guess it's just a waiting game now?


You don't want all of your CC reporting a 0 balance.  FICO likes to see you have credit but use it wisely.

 

Do you have any negatives on your CR?


myFICO is the consumer division of FICO. Since its introduction 20 years ago, the FICO® Score has become a global standard for measuring credit risk in the banking, mortgage, credit card, auto and retail industries. 90 of the top 100 largest U.S. financial institutions use the FICO Score to make consumer credit decisions.

>> About myFICO
FICO Score - The Score that matters
Click to Verify - This site chose VeriSign SSL for secure e-commerce and confidential communications.
Fair Isaac Corporation is a BBB Accredited Financial Service in San Rafael, CA
FOLLOW US Social Media Facebook Twitter Pinterest Google+
}