topic Re: How big of a score drop will I take? in Understanding FICO® Scoring

How big of a score drop will I take?

Anonymous — Tue, 20 Dec 2016 13:59:45 GMT

Precursor: I'm not planning on applying for anything for the next 6 - 12 months.. Currently I have $28,500 available credit with $2,916 showing on utilization of which a lot is at 0% interest. This coming month im going to be showing around $9,250 in total debt. My cards with balances will be at 35% or less. The one that scares me is my NFCU CLOC that is going to be at $4,500 of $5,000..

I do still have 3 collections showing on my report. I will have my credit cards and LOC all paid in full by the end of April as well as the 3 remaining collections paid in full (2 of which will be PFD, leaving only the Midland collection which wont come off until the end of 2018)

I will be paying down $1,500 per month over the next 3 months, and will be reimbursed by my company for the remaining $5,000 in april as well as having $1,500 allocated that month as well to make sure I cover the cards/LOC that do have interest.

Current Scores for today 12/20/16: EQ - 652, TU - 649, EX - 661

Simulated scores for 04/20/2017: EQ - 667, TU - 664, EX - 661

Simulated scores for 06/20/2017: EQ - 672, TU - 664, EX - 666

Simulated scores for 12/20/2017: EQ - 692, TU - 674, EX - 671

Personal Income: $80,000 per year

Here is how everything will hit next month. Im curious as to how big of an impact its going to make on my score. I know utilization has no memory but I have been working so hard to get my scores up, I dont want to scare any of my creditors.

Cards/LOC	Due Date	Current Limit	Remaing Bal.
Discover	1/1/2017	$1,000	$300
Overstock	1/4/2017	$2,200	$600
Big Lots	1/4/2017	$1,000	$0
Capital One	1/5/2017	$2,000	$500
BOA	1/6/2017	$2,800	$800
Sportsman	1/6/2017	$1,500	$400
Amazon	1/8/2017	$3,500	$700
NFCU LOC	1/12/2016	$5,000	$4,500
NFCU	1/16/2017	$1,600	$400
Merrick	1/18/2017	$1,400	$300
Wayfair	1/20/2017	$2,200	$150
Walmart	1/22/2017	$3,500	$600
Lowes	1/23/2017	$300	$0
Penfed	1/31/2017	$500	$0
		$28,500	$9,250

My goal to reduce the impact of how many cards are carrying a balance would be to pay $50 on every card, pay off Wayfair, Merrick, Discover, and throw $500 at the NFCU LOC. Then next month wash, rinse, repeat.

So with all of that said, how much do you think my scores are going to be impacted over the next couple of months? Is my plan sound? I will be excited to pay everything off so that I can officially close Merrick, Wayfair, Overstock, Big Lots. Putting me at a total of 5 Major Cards, 3 Store cards, 2 LOC

I also would like to mention, at the end of paying everything off in April I will ask for CLI on most of my cards that i'm keeping, the majority of them will be ready for a 6 month increase in March and the rest in April. However, i would like to wait until everything is reported as PIF before I ask for any increases.

Re: How big of a score drop will I take?

Anonymous — Wed, 21 Dec 2016 01:27:47 GMT

THe answer is that it doesn't matter. People could try to give you a Jeane Dixon prediction about what your scores would be in the next 60 days but it would still be wildly speculative.

Creditors are used to people maxxing out their revolving lines of credit around Christmas time. If they took adverse action against people who's CC debt bumps up this time of the year they'd be out of a job. And your total utilization, even including the CLOC, is only about a third of your credit limit.

So here are the key things to remember:

* Creditors are used to seeing a holiday spike in revolving utilization. And they are used to seeing a lot worse than you will be.

* You do not need your credit scores for anything for at least six months, probably much longer.

* You have a clear plan for how you will be paying off all your revolving debt in the next four months.

Boom. Game over.

Your plan sounds GREAT, by the way. Basically perfect. The only slight tweak I might make is to make sure you are paying well over the minimum payment on each account, including but especially the 90% utilized CLOC. Paying only the minimum payment is a behavior statistically associated with risk. By paying more than the minimum on every account you will be assuring each account holder that you are a safe customer who intends to make a substantial dent each month in his debt.

Re: How big of a score drop will I take?

Revelate — Tue, 20 Dec 2016 14:56:49 GMT

Actually with your file I suspect you're leaving more on the table just in number of revolving tradelines with balances than you are with the non-trivial individual utilization on NFCU. As CGID rightly suggests I wouldn't worry about it.

Re: How big of a score drop will I take?

Anonymous — Tue, 20 Dec 2016 17:55:57 GMT

Thank you both for the great advice. I figured I was probably reading too much in to it. I just wanted to make sure all would be good. I have never used this much credit before at one time. The most I have ever utilized was around $4,500 but my available credit was only around $15k at the time.

I will definetly sleep easier now. I was just nervous about everything lol.. I am going to attempt to throw even more $$ at paying everything off as well. My budgeted amount is a baseline of $1,500 but i could potentially put up to $2,500 into paying everything off sooner per month.

Thanks again