Question about utiliztion

[Anonymous]

If I make a lumpsum payment on my credit cards taking my utilization from 65% to 5%, Will my score get a major one time boost or will it slowly go up since my utilization has hovered between 50 and 75% for the last 5 years?

[Anonymous]

It should take a big one time boost - so long as no negatives are added as well.

Depending on the number of cards you have, try to work it so under half report and those that report are at 9% or lower. If you can pay it down to 5% across the board you should be able to shift it appropriately. But there is no need to play this game unless you are in the market for a loan right now

[MidnightVoice]

Your score is a snapshot of the day it was pulled.  This means that the result should be immediate

[RobertEG]

I concur fully that current FICO score is a snapshot, with no memory cells.  But your CR is not.  A full CR includes a showing of prior balances for several months.  If a prospective creditior pulls you CR and sees high past balances, that may raise some questions.  FICO score is not the only consideration in a lendor decision.  So I would not offer the simple opinion that recent pays wipe out consideration of prior balances in a credit evaluation.

[haulingthescoreup]

After a big util paydown: immediate big hop, and then if you keep it low, and don't mess up with anything else, the scores will continue to creep upwards from there. When the sims say to pay your balances down over 24 months, this is what they're really meaning.

[Anonymous]

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RobertEG wrote:

I concur fully that current FICO score is a snapshot, with no memory cells.  But your CR is not.  A full CR includes a showing of prior balances for several months.  If a prospective creditior pulls you CR and sees high past balances, that may raise some questions.  FICO score is not the only consideration in a lendor decision.  So I would not offer the simple opinion that recent pays wipe out consideration of prior balances in a credit evaluation.

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I tend to agree with these statements, Robert, but there is a flipside as well.  Having a record of large balances in the past which have since been paid off shows potential future creditors that one has a record of incurring debts and then paying them off over time.  I don't think a lender would necessarily hold it against an applicant just for having used the credit available to them and then having paid it off.  That is what credit is all about.

[fused]

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cheddar wrote:

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RobertEG wrote:

I concur fully that current FICO score is a snapshot, with no memory cells.  But your CR is not.  A full CR includes a showing of prior balances for several months.  If a prospective creditior pulls you CR and sees high past balances, that may raise some questions.  FICO score is not the only consideration in a lendor decision.  So I would not offer the simple opinion that recent pays wipe out consideration of prior balances in a credit evaluation.

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I tend to agree with these statements, Robert, but there is a flipside as well.  Having a record of large balances in the past which have since been paid off shows potential future creditors that one has a record of incurring debts and then paying them off over time.  I don't think a lender would necessarily hold it against an applicant just for having used the credit available to them and then having paid it off.  That is what credit is all about.

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Great post and I agree 100%!

[RobertEG]

Cheddar and fused, I would never dispute your learned opinions,  But the final decision is in the eyes of the lendor,  and not in the eyes of the forum.  A fico snapshot does not ensure a credit decision.  A snapshot of my ex-wife has littlle meaning to me on the rest of my life.

Message Edited by RobertEG on 04-24-2008 11:33 PM