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Paying off some cards and working on others

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Anonymous
Not applicable

Paying off some cards and working on others

Hi. I am new to this. We let our score tank by getting overextended in debt and not really caring about our score. We are sitting somewhere below a 650. I say somewhere, because we had our credit pulled 3 weeks ago for installing solar that required a 650 and they said we had a 647. Capital One Tracker says 609 and Barclay says 624. We had alot of debt on our cards and just paid some down 2 days ago with our tax refund. Went from 88% total utilization to about 45%. We have 4 cards and paid off the largest and smallest and also one small Kohls card. That left the middle 2 cards with one being at 90% and the other at about 70%. We plan on throwing any extra we can at the debt but it will still be slow going. Im wondering if you all think this will help our score? We are trying not to use the cards at all and pay off the debt. Is that a smart thing to do or should we use them a little and then pay off? We also got an auto loan for $23,000 in December. Our score went from a 650 (Cap 1 Tracker) in September to the 609 currently. Was that from the auto loan or the maxing of the cards? We have 100% on time payment record.

 

Capital One $5500 limit/balance 0 (just paid that off, was $5400 balance)

Capital One $600 limit/balance 0 (just paid that off, balance was $481

Capital One $3300 limit/balance $3000

Barclay $4900 limit/balance $3600

Kohls $600 limit/balance 0 (just paid off, balance was $250

 

Any help is appreciated! Thanks!!!!

14 REPLIES 14
Revelate
Moderator Emeritus

Re: Paying off some cards and working on others


@Anonymous wrote:

Hi. I am new to this. We let our score tank by getting overextended in debt and not really caring about our score. We are sitting somewhere below a 650. I say somewhere, because we had our credit pulled 3 weeks ago for installing solar that required a 650 and they said we had a 647. Capital One Tracker says 609 and Barclay says 624. We had alot of debt on our cards and just paid some down 2 days ago with our tax refund. Went from 88% total utilization to about 45%. We have 4 cards and paid off the largest and smallest and also one small Kohls card. That left the middle 2 cards with one being at 90% and the other at about 70%. We plan on throwing any extra we can at the debt but it will still be slow going. Im wondering if you all think this will help our score? We are trying not to use the cards at all and pay off the debt. Is that a smart thing to do or should we use them a little and then pay off? We also got an auto loan for $23,000 in December. Our score went from a 650 (Cap 1 Tracker) in September to the 609 currently. Was that from the auto loan or the maxing of the cards? We have 100% on time payment record.

 

Capital One $5500 limit/balance 0 (just paid that off, was $5400 balance)

Capital One $600 limit/balance 0 (just paid that off, balance was $481

Capital One $3300 limit/balance $3000

Barclay $4900 limit/balance $3600

Kohls $600 limit/balance 0 (just paid off, balance was $250

 

Any help is appreciated! Thanks!!!!


Welcome to the forums!

 

Credit Tracker isn't a valid (read as: used by any lender) credit score so take what it suggests with a healthy degree of skepticism; however, maxxing out your credit cards is a big penalty under FICO algorithms too.

 

The major hit was maxxing the credit cards, getting the auto loan dependant on what was in your file previously was probably mostly a wash; honestly just do what makes financial sense and pay down the high APR credit cards.  There's no problem using the CC's still as long as you're paying the new charges + old charges and making progress there... if you basically use the CC's same as cash (being a transactor as it's sometimes called) it's not an issue.

 

From where you're at, you would've already gained some points back from the payments, but for a FICO perspective I'd try to pay down that Cap One card to something like 70% of the limit and then just work on whichever one has a higher APR while babysitting the other one at that 70% line.  You probably have already gotten more than enough back on the solar financing application at least just from what you've already done (smart use of your tax refund btw!).

 

Use the Barclay's score as your benchmark, but it doesn't update fantastically often in my experience but it's good enough for broad general direction.




        
Message 2 of 15
Appleman
Valued Contributor

Re: Paying off some cards and working on others

Welcom to myFICO!

Plenty of helpful people on the boards here to offer advice. Always check to make sure any advice has been further researched by you and makes sense to you..

 

Any credit card that is greater than 90% utilized is often considered MAXXED out, something lenders do not like.

 

Advice that I would give:

1. Keep paying everything on time. Your score will really suffer if you have a late (even once) reported.

2. Do not create addition debt. 

3. Pay the higher utilization card (the one at 90.9%) down first.

Your Cap1 3000/3300 is 90.9 % utilized.

Next Cap 1 3600/4900 is at 73.4% Utilization

 

As your utilization % drops you are likely to see score imcreases. Everybody has a different credt profile but I had increases in my scores for dropping below 90%, 70%, 50% and 30% utilization.

Good luck

Message 3 of 15
Anonymous
Not applicable

Re: Paying off some cards and working on others

Thank you so much!

 

For the utilization do they take total credit of all cards and find the percentage used, or is it how much on each card?

 

The reason we paid off the higher Capital One was it had interest. The smaller one that has the 90% balance is at 0%.

 

How long before we see some activity on our score by paying off the 2 cards?

 

Where can we get a true score (without paying if possible)?

 

Thanks again!!!

Message 4 of 15
Revelate
Moderator Emeritus

Re: Paying off some cards and working on others


@Anonymous wrote:

Thank you so much!

 

For the utilization do they take total credit of all cards and find the percentage used, or is it how much on each card? Both, aggregate is dominant though

 

The reason we paid off the higher Capital One was it had interest. The smaller one that has the 90% balance is at 0%. Do what makes sense financially unless you need a scoring win, ergo pay off the non 0% card first, you'll get out of debt faster that way which ultimately is more important than FICO scores.

 

How long before we see some activity on our score by paying off the 2 cards?  As soon as those new balances are reported to the bureaus, generally a few days after the statement cuts.

 

Where can we get a true score (without paying if possible)?  Barclays is a FICO TU 8, that's a good score to have, it just doesn't update as frequently as might be desired.

 

Thanks again!!!


 




        
Message 5 of 15
Anonymous
Not applicable

Re: Paying off some cards and working on others

We do want our score up as we want to qualify for the solar as our electric bill is through the roof. Needs to be at least 650. We were denied by them 3 weeks ago with a 647 (Equifax). I will keep watch of the Barclay's score. It's frustrating as waiting on changes in our score is like watching water boil!!! Don't want to have solar company pull credit too soon as they said it was a soft hit, but I did see it on our credit report under the inquiries.

Message 6 of 15
SouthJamaica
Mega Contributor

Re: Paying off some cards and working on others


@Anonymous wrote:

Hi. I am new to this. We let our score tank by getting overextended in debt and not really caring about our score. We are sitting somewhere below a 650. I say somewhere, because we had our credit pulled 3 weeks ago for installing solar that required a 650 and they said we had a 647. Capital One Tracker says 609 and Barclay says 624. We had alot of debt on our cards and just paid some down 2 days ago with our tax refund. Went from 88% total utilization to about 45%. We have 4 cards and paid off the largest and smallest and also one small Kohls card. That left the middle 2 cards with one being at 90% and the other at about 70%. We plan on throwing any extra we can at the debt but it will still be slow going. Im wondering if you all think this will help our score? We are trying not to use the cards at all and pay off the debt. Is that a smart thing to do or should we use them a little and then pay off? We also got an auto loan for $23,000 in December. Our score went from a 650 (Cap 1 Tracker) in September to the 609 currently. Was that from the auto loan or the maxing of the cards? We have 100% on time payment record.

 

Capital One $5500 limit/balance 0 (just paid that off, was $5400 balance)

Capital One $600 limit/balance 0 (just paid that off, balance was $481

Capital One $3300 limit/balance $3000

Barclay $4900 limit/balance $3600

Kohls $600 limit/balance 0 (just paid off, balance was $250

 

Any help is appreciated! Thanks!!!!


Your scores will benefit substantially by getting the Capital One balance below 1500, the Barclays balance below 2450, and the car loan balance below 80% of the original amount.

 

If you're going to use credit cards, be sure to use the cards that have zero balance, and to pay them down to zero before the statements cut.

 

Getting rid of the Kohls card altogether may help, too.

 

 

 

 


Total revolving limits 741200 (620700 reporting) FICO 8: EQ 701 TU 704 EX 685

Message 7 of 15
SouthJamaica
Mega Contributor

Re: Paying off some cards and working on others


@Anonymous wrote:

Thank you so much!

 

For the utilization do they take total credit of all cards and find the percentage used, or is it how much on each card?

 

There's overall utilization and there's per-card utilization, and they both count in your FICO score.

 

The reason we paid off the higher Capital One was it had interest. The smaller one that has the 90% balance is at 0%.

 

FICO doesn't care how great your interest rate deal is; so sometimes you have to choose between the economics and the score.

 

How long before we see some activity on our score by paying off the 2 cards?

 

There will be activity as soon as the the statement cuts + the statement cut balance is reported; however, whether you will see the activity that soon is problematic, unless you're using a service like MyFICO or experian.com. The free FICO scores provided by your bank update once a month at best, and often go 2 months between updates. The FAKO scores like Vantage 3.0 are worthy, and no less valid, but they're not FICO scores, and they're often wildly different than one's FICO scores.

 

Where can we get a true score (without paying if possible)?

 

Best thing is to sign up at MyFICO, but that costs. If you want free, you can get it from various credit card sites, but they don't update frequently. Discover, Citibank, Amex, Barclays all provide true FICO scores, but update infrequently.

 

Thanks again!!!


 


Total revolving limits 741200 (620700 reporting) FICO 8: EQ 701 TU 704 EX 685

Message 8 of 15
Revelate
Moderator Emeritus

Re: Paying off some cards and working on others


@SouthJamaica wrote:

@Anonymous wrote:

Hi. I am new to this. We let our score tank by getting overextended in debt and not really caring about our score. We are sitting somewhere below a 650. I say somewhere, because we had our credit pulled 3 weeks ago for installing solar that required a 650 and they said we had a 647. Capital One Tracker says 609 and Barclay says 624. We had alot of debt on our cards and just paid some down 2 days ago with our tax refund. Went from 88% total utilization to about 45%. We have 4 cards and paid off the largest and smallest and also one small Kohls card. That left the middle 2 cards with one being at 90% and the other at about 70%. We plan on throwing any extra we can at the debt but it will still be slow going. Im wondering if you all think this will help our score? We are trying not to use the cards at all and pay off the debt. Is that a smart thing to do or should we use them a little and then pay off? We also got an auto loan for $23,000 in December. Our score went from a 650 (Cap 1 Tracker) in September to the 609 currently. Was that from the auto loan or the maxing of the cards? We have 100% on time payment record.

 

Capital One $5500 limit/balance 0 (just paid that off, was $5400 balance)

Capital One $600 limit/balance 0 (just paid that off, balance was $481

Capital One $3300 limit/balance $3000

Barclay $4900 limit/balance $3600

Kohls $600 limit/balance 0 (just paid off, balance was $250

 

Any help is appreciated! Thanks!!!!


Your scores will benefit substantially by getting the Capital One balance below 1500, the Barclays balance below 2450, and the car loan balance below 80% of the original amount.

 

If you're going to use credit cards, be sure to use the cards that have zero balance, and to pay them down to zero before the statements cut.

 

Getting rid of the Kohls card altogether may help, too.

 

 

 

 


Solar company may not be using FICO 8 so paying the installment loan down isn't a high priority, whereas revolving utilization is an issue on all algorithms.

 

Also keeping the Kohls card benefits in this case from the number of revolving tradelines with balance calculation, more 0's more better as long as one of the cards has a balance... that holds for anyone's file but closing cards is rarely beneficial.




        
Message 9 of 15
SouthJamaica
Mega Contributor

Re: Paying off some cards and working on others


@Revelate wrote:

@SouthJamaica wrote:

@Anonymous wrote:

Hi. I am new to this. We let our score tank by getting overextended in debt and not really caring about our score. We are sitting somewhere below a 650. I say somewhere, because we had our credit pulled 3 weeks ago for installing solar that required a 650 and they said we had a 647. Capital One Tracker says 609 and Barclay says 624. We had alot of debt on our cards and just paid some down 2 days ago with our tax refund. Went from 88% total utilization to about 45%. We have 4 cards and paid off the largest and smallest and also one small Kohls card. That left the middle 2 cards with one being at 90% and the other at about 70%. We plan on throwing any extra we can at the debt but it will still be slow going. Im wondering if you all think this will help our score? We are trying not to use the cards at all and pay off the debt. Is that a smart thing to do or should we use them a little and then pay off? We also got an auto loan for $23,000 in December. Our score went from a 650 (Cap 1 Tracker) in September to the 609 currently. Was that from the auto loan or the maxing of the cards? We have 100% on time payment record.

 

Capital One $5500 limit/balance 0 (just paid that off, was $5400 balance)

Capital One $600 limit/balance 0 (just paid that off, balance was $481

Capital One $3300 limit/balance $3000

Barclay $4900 limit/balance $3600

Kohls $600 limit/balance 0 (just paid off, balance was $250

 

Any help is appreciated! Thanks!!!!


Your scores will benefit substantially by getting the Capital One balance below 1500, the Barclays balance below 2450, and the car loan balance below 80% of the original amount.

 

If you're going to use credit cards, be sure to use the cards that have zero balance, and to pay them down to zero before the statements cut.

 

Getting rid of the Kohls card altogether may help, too.

 

 

 

 


Solar company may not be using FICO 8 so paying the installment loan down isn't a high priority, whereas revolving utilization is an issue on all algorithms.

 

Also keeping the Kohls card benefits in this case from the number of revolving tradelines with balance calculation, more 0's more better as long as one of the cards has a balance... that holds for anyone's file but closing cards is rarely beneficial.


There's a lot of anecdotal evidence that the biggest advice loan officers (like the person who might have to pass on their solar application) like to give people is to close their store cards. That's why I mentioned it, not as a pure scoring thing.

 

 


Total revolving limits 741200 (620700 reporting) FICO 8: EQ 701 TU 704 EX 685

Message 10 of 15
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