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

Valued Member

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


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Message 1 of 9
8 REPLIES
Super Contributor

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

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Message 2 of 9
Established Contributor

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.

      
Message 3 of 9
Moderator Emerita

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

Message 4 of 9
Established Contributor

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!

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Message 5 of 9
Regular Contributor

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


 

Message 6 of 9
Contributor

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?

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Message 7 of 9
Highlighted
New Visitor

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?

Message 8 of 9
Epic Contributor

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?

Message 9 of 9