HELP! I have been making myself crazy reading all of these posts and researching for the last month. My husband and I want to build a house, and what is stopping us is my poor credit history. We were told that we only need to get me up to 600 and she would give us the pre-approval. So we decided to take $6500.00 from our savings to pay off all my old credit card debts. Totalling 9 cards, most of them stupid department store cards from my 20's. 3 of the cards were over limit due to them decreasing it on me after a year of ontime payments! The other 7 were all 50%+ utilization. My question is....how much do you think my score will go up? And do the cards that were OVER limit count as more point dings?
Currently my scores were 568, 568, and 620. I am so close but not sure if we are going to make it. So far only 2 cards are reported as paid down, and my score according to Credit Karma (not very acccurate I know) went up 14 points. Are 32+ points far fetched?
Yes, cards over the limit are dinged more.
If you paid down your utilization significantly, say from 90% to 10%, you would more than likely see an increase. It is also dependent on what else is on your CR at the time. CAs and COs may hinder an increase.
Don't let all of your cards report a 0 balance. FICO likes to see you use your credit but, wisely. If you have 9 cards you can let half report 0 and the others 9% or below. YMMV and you can experiment with the % and number of cards reporting a balance or a 0. FICO is a snapshot of what is on your CR at any given time and has no memory. So if you don't see what you want, do something differently and see if that makes a difference.
It is also important to know when they report to the CRAs. It is the report balance that counts. If it is too high, pay it down and ask for a mid-cycle update. They don't have to do it but may.
I do have 5 accounts in collections from 3 years ago. 3 of them medical. All are under $200. I disputing one now bc I have recepit of paying it. Another medical collection is being paid back to the people who sent me to collections. So I am not sure if they will remove this collection, I need to call and find out. Hoping they do!