Paying off Credit Card debt... couple questions

Anonymous · ‎07-11-2007

I am currently about 1650 in debt which makes it hard to get the student loan that I need so I was going to pay off 90% of my debt to boost my score. I "simulated" my FICO score and the program reported that my score would jump up to between 688 and 728 from 598. Is this fairly close to what it would really be? Citi: 1000 balance/1500 limit CapitalOne: 500/750 Orchard: 150/300 Also, I just called my lenders (SallieMae) for my loan and they said that if I paid off my cards it would reflect on my credit almost immediately - thus they might accept me because my score/overall standing was better than it previously would have been had I not paid the cards off. So will it reflect right away like they said? Or should I wait a month before I apply for the loan?

Anonymous · ‎07-11-2007

I think the simulation is viewing your situation through rose-colored glasses. You will see an increase, but not THAT big of an increase. Still, you'll likely save about $20-$35 a month in interest by paying debt down. Low utilization also increases your chances for CLIs, which help your score and look good on manual reviews.

FICOnater2007 · ‎07-11-2007

I'm pretty new here and not the expert, but I'd say it won't show "instantly" .

For example, on my FreeCreditReport.com credit analyzer, it said I needed to open a major credit card to boost my score. You see, about two years ago my wife and I PAID OFF our cards and closed the accounts. We thought we were doing the right thing at the time (besides, I always pay for things with my debit card which can double as a credit card..!).

Long story short, I did what FCR.com said and opened a "share-secured" VISA card. It took until the first statement was generated by the credit union for that card to appear on the credit report. But when it did the score went up by 20 points.

I'd bet on it taking at least 15 days to 1 month to show. Plus, I'd be on the phone to those creditors (and/or send letters) requesting them to update their reporting to the big three bureaus ASAP.

Good luck!

FICOnater2007