topic Re: How many points could you get when paying off credit card (UTI @ 90%. Will pay it down to 15% UT in Understanding FICO® Scoring

How many points could you get when paying off credit card (UTI @ 90%. Will pay it down to 15% UTI)

Anonymous — Thu, 16 Nov 2017 22:22:25 GMT

Hello all!

I was thinking of something and trying to rap my head around a good number. Currently my 1 of 2 cc's are sitting at 90% UTI as I use it heavily. I have a payment set up for $1350.00 to go towards the card as the limit is 1500.00 today. Im know this will have my UTI go down big time but was trying to think of #(%) that I would be sitting at and how many points i will gain in the process, with this payment now processing. My statement will cut in 3 days after this as I will not touch this card and let my new limit go threw and afterwards I will start using it at the begining of the cycle.

Do we have any really smart people out here (lol) who would have any idea what my UTI percentage(%) and points I can (will) be sitting at when my Credit Report updates? Currently I have FICO'S OF TU 667 EQ 641 AND EXP 654. I was doing a lot traveling these past 2 weeks so needed to gain some points on my cash rewards card. Thanks everyone and hope to get some good conversation going on this, Im super excited to see what I will be at soon and figured i culd ask all of you before it happens??! Will be appyling for 3 new cards next week after this payment, statement and credit updates.

Re: How many points could you get when paying off credit card (UTI @ 90%. Will pay it down to 15% UT

Anonymous — Thu, 16 Nov 2017 23:56:26 GMT

What was your utilization on each card? What will your utilization report on each card this month? Not just the one card?

Re: How many points could you get when paying off credit card (UTI @ 90%. Will pay it down to 15% UT

Anonymous — Fri, 17 Nov 2017 02:30:11 GMT

Hey there ABCD2199!

Thanks for responding. My UTI on my 1st card is 20% but I'm going to pay that down on the 28th to where it will report 5% and the one im talking about now on this forum is 90% which I paid today and it will report around 15%. Total this month (total UTI is 72 %). And idea what you think my UTI and how many points I might get?
Thanks!!!

Re: How many points could you get when paying off credit card (UTI @ 90%. Will pay it down to 15% UT

Anonymous — Fri, 17 Nov 2017 20:51:34 GMT

You have mentioned what your individual utilizations were on two of your cards and what the u% will be after paydown. You also mention what your total util was. You do not, however, mention what the total util will be after paydown. That's important to know.

Personally I have a bit of a different take on your question. My thinking is that you should just pay off all your CC debt because its the right thing to do. It will save you a lot of money, so just do it. Then you'll know what the scoring benefit is later after you have done it.

Pay all CC debt off and then allow one card to report a small balance.

Re: How many points could you get when paying off credit card (UTI @ 90%. Will pay it down to 15% UT

Anonymous — Fri, 17 Nov 2017 21:46:50 GMT

For me I had a massive data point from September because of Irma causing me to not have an internet signal the 4 days when I usually PIF my cards before statement cut. So instead of PIF, 3 of my 6 cards reported over 90% instead of $0.

As you can see, my AZEO FICO on August 26 was 660. Then I went out to sea on a sailing expedition that should have lasted 5-6 days but ended up around 10-11 days so I missed ALL of my statement cuts while at sea. So I went from AZEO ($50 balance on one card) to 3 cards maxed out (93-95%) and one card with a balance over 9%. I had 6 cards total, 4 reported balances. My score dropped from 660 on 8/26 down to 616 on 9/15 when my last balance updated. 44 point slaughter. The thing is, my report also had an unpaid collection reporting from January of this year, so if you have a clean profile, it's feasible your maxed cards may hurt you even more.

On 9/21, one of my maxed out cards re-reported to $0 because it's a Chase card so they updated midcycle. My score went up 10 points to 626 so of the 44 point drop, I reclaimed 10. On 10/5 my score went up another 6 points to 632 because my card reporting more than 9% was PIFd. On 10/7 another maxed out card showed PIF so score went up 15 points to 647. Then on 10/12 another PIF card was reported so I went up 11 points to 658 -- which is about where I started.

On 10/15, my unpaid collection dropped off for no reason, so my score shot up another 56 points from that, so ignore everything yellow as it doesn't fit the data points for the prior month.

Basically, here are the data points:

AZEO = 660
One card out of 6 maxed out plus one small balance = 17 point drop total
Two cards out of 6 maxed out plus one small balance = 33 point drop total
Three cards out of 6 maxed out plus one small balance = 44 point drop total

I bet if I had a totally clean profile, the point drops would be FAR worse but that's just conjecture as I won't test it out again and now I will PIF all my cards BEFORE going sailing again, lolol

I also have this belief that the NUMBER of credit cards maxed out based on your TOTAL number of credit cards probably has some effect on how many points are lost. Meaning if you maxed out 1 card and had 19 other cards at $0, it might probably affect your scores less than you have you have 1 maxed out card and 2 others at $0. I have no idea, not enough people share these data points for me to calculate it unfortunately. But if I have 6 cards and the "total maxed out penalty" is 100 points, then 16 points per card is probably likely. So 6 cards x 16 points = 96 possible points, seems probably correct. It's actually 16.666 for 6 cards, so 1 card = 17, 2 cards = 33, 3 cards = 50...Pretty darned close.

Re: How many points could you get when paying off credit card (UTI @ 90%. Will pay it down to 15% UT

Jwagner — Fri, 17 Nov 2017 22:20:01 GMT

...and then you get things like what happened to me today, reporting on my myFICO. Experian knocked me down 27pts for DECREASING my C1V1 balance by $700 and going from 49 to 14% util. Good thing those bastards don't know it's actually paid off and sitting at $3 instead of $299. They'd probably take another 20pts. Rediculous.

Really only goes to show that much of the scoring system is seemingly completely random, arbitrary and composed in good part, of equine by-product

Re: How many points could you get when paying off credit card (UTI @ 90%. Will pay it down to 15% UT

Anonymous — Fri, 17 Nov 2017 22:26:27 GMT

There's no way you were dings 27 points for reducing your credit balance. Something else happened on your profile but I honestly would need a fine toothed comb and both reports to tell you what it was.

I've been working on a FICO simulator calculator now for 6 months and have put in almost 40 people's credit reports and FICO8s and the calculator is coming together very well for me (in fact, it even estimated what my scores would jump if my collection disappeared and it was within 5 points of correct).

In the 6 months I've been working on this thing, I have never once seen a FICO score change that is random. Not at all. And I've looked at 40 different profiles from 40 people, who run the gamut of "this person deserves a 400 FICO score" to the unicorn "Why are you only at 837 and not 850?" profiles. All of their FICO changes make sense to me and after explaining it to them, they understand better.

Go over your 1B report and compare every line and see. A 27 point drop could be anything: a new account showing up, an incorrectly reported balance or limit are common reasons for a drop of that magnitude. 27 points out of 550 = 5% drop in points, so it's something serious enough. If an account went inactive due to no usage, it's also feasible you dropped below the 5+ credit card number that FICO wants to see for maximum boost (that's assuming you only have 5 cards or so). Also, if you paid off your only installment loan recently, that could slay your scores 27 points, too.

Re: How many points could you get when paying off credit card (UTI @ 90%. Will pay it down to 15% UT

Anonymous — Fri, 17 Nov 2017 22:27:17 GMT

WOW ABCD2199

That was pretty freak AWESOME what you just told me and thanks so much for the insight! Last month, as I only have 2 cc's but did max out as well as I said before, I travel a lot, and do it for work and pleasure. So my point dropped a ugly 32 point for 1 CARD!

Then the other card I have, i ran that up to useage of 75%. So all together, my point went dow a good 56 point al together. From what you told me and from what I gathered i would guess somewhere around 50 to 60 some point as I have gotten back 33 already as my statement and score updated. Now to wait at the end of this month to see what happen when this last card I have will be PIF.

Re: How many points could you get when paying off credit card (UTI @ 90%. Will pay it down to 15% UT

Anonymous — Fri, 17 Nov 2017 22:28:36 GMT

Re: How many points could you get when paying off credit card (UTI @ 90%. Will pay it down to 15% UT

Anonymous — Fri, 17 Nov 2017 22:31:24 GMT

@Anonymous wrote:
WOW ABCD2199

That was pretty freak AWESOME what you just told me and thanks so much for the insight! Last month, as I only have 2 cc's but did max out as well as I said before, I travel a lot, and do it for work and pleasure. So my point dropped a ugly 32 point for 1 CARD!

Then the other card I have, i ran that up to useage of 75%. So all together, my point went dow a good 56 point al together. From what you told me and from what I gathered i would guess somewhere around 50 to 60 some point as I have gotten back 33 already as my statement and score updated. Now to wait at the end of this month to see what happen when this last card I have will be PIF.

I wish I knew you in person so we could sit down and put that data in! I'm just throwing darts right now but your data helps.

Let's assume that you have a total of 100 points possible. If one card is maxed out (over 89% usage) that's 50 points gone. If the other card is between 69% and 89%, maybe that's 80% loss (40 points). But you say you feel you lost 60 points, so my math estimate is obviously incorrect, lol. Still, it's obvious that both your credit cards reporting balances is hurting you MASSIVELY.

Please do note that FICO "allows" you to get 3 credit cards without the "new account" penalty hitting very hard. So once you get one card to $0 and the other card reporting between $5 and 8% utilization, your scores should be high enough for you to get a third card and you'll get some magical FICO points for going from 2 to 3 cards. Post here for card ideas before applying of course but I bet your scores will look gorgeous in 6-7 months if you have 3 cards reporting.

FICO actually prefers seeing 5 cards total (or more) but cards #4 and #5 will penalize you with the "new account penalty" for 6 months of aging. So get to 3 cards first, and after they age a bit, get cards 4 and 5 and 6 months later, you'll really have a nice FICO score -- if you manage your utilization well. During a rebuild, you really shouldn't carry a balance because that means you're building debt, not building great credit. Never build debt. Better to go without TV and Netflix than carry a balance during a rebuild!

Re: How many points could you get when paying off credit card (UTI @ 90%. Will pay it down to 15% UT

Anonymous — Fri, 17 Nov 2017 22:33:59 GMT

And so you know I did have 1 late payment in June so I can probably say that why the big score drop as well

Re: How many points could you get when paying off credit card (UTI @ 90%. Will pay it down to 15% UT

Anonymous — Fri, 17 Nov 2017 22:38:45 GMT

Yeah, if it is only one 30D and it's only on one account, it will hurt you most for 3 months (June, July, August, maybe September) and then start hurting less. I believe the one 30D late breakpoints are 0-3 months, 3-6 months, 6-12 months, 12-24 months, 24-36 months, 36-48 months and "older than 48 months" when they hurt the least.

After a year of using and paying that account, start a goodwill "saturation" campaign to get it removed.

Re: How many points could you get when paying off credit card (UTI @ 90%. Will pay it down to 15% UT

Anonymous — Fri, 17 Nov 2017 22:49:06 GMT

Man I so wish I coould meet as well and this is the best advice i EVER HAD! I will def get 1 more card to make it 3 then wait 5 to 6 months and get 2 more. Thanks for the advice and will keep you posted on the new app I'd go for next week!

Re: How many points could you get when paying off credit card (UTI @ 90%. Will pay it down to 15% UT

Anonymous — Fri, 17 Nov 2017 22:50:24 GMT

Man I so wish I could meet as well and this is the best advice i EVER HAD! I will def get 1 more card to make it 3 then wait 5 to 6 months and get 2 more. Thanks for the advice and will keep you posted on the new app I'd go for next week!

Re: How many points could you get when paying off credit card (UTI @ 90%. Will pay it down to 15% UT

Anonymous — Fri, 17 Nov 2017 22:58:13 GMT

What I would suggest is start calculating your AAoA right now and forecast it. Then in the future, you can do an AAoA estimate as to what would happen if a new account is opened. I suggest trying to get up to 12 months AAoA and then keeping it about 6 months AAoA going forward (at a minimum).

It's easy to do math in your head with just a few cards. Add up how many months old each card is and add those months together.

If you have 2 new cards and add a 3rd, wait until all 3 cards age totals 36 months. 36 months / 3 = 12 months average age.

Then if you want to add a 4th card and 5th card, you're already at 36 months so 36 months / 5 accounts = 7.2 months average so you're above the 6 month penalty point! And in 5 months after you add 4 and 5, you're back up to 12 months average.

Then do your own math and see if you can keep it above 12 months. There's no benefit between 6 months average and 24 months average, so once you've aged everything enough to get to 24 months average, you want to apply with the intent to keep it over 24 months even with new accounts (which is easier as you add more credit cards).

PM me if you want an easy spreadsheet to manage that math!

Re: How many points could you get when paying off credit card (UTI @ 90%. Will pay it down to 15% UT

Anonymous — Fri, 17 Nov 2017 23:24:42 GMT

I will definilty PM you as I love everything about maaging credit and credit period! Funny thing is I work in the industry (financial) so learning more is fasinating to me! Once I am home I will ask you then and PM you. Thanks so much for your help! So you know as of now, I'm sitting at 5 years and 1 month (5.1 years)? Had to repair my credit as it was horrible starting back in 2015 after grad school but still managed to keep a good payment history with my car loan except that 1 late payment (just a 30 day) but in fact late..

(father and grandfather passed away in the same month this pass year so I had no choice but to let the payment go in late.) Wells Fargo auto was very understaning and even waived the later fee, plus sent me flowers.

Re: How many points could you get when paying off credit card (UTI @ 90%. Will pay it down to 15% UT

Anonymous — Fri, 17 Nov 2017 23:35:08 GMT

That car loan helps but once it's paid off, you'll want to make sure you have another loan in place. I highly highly suggest doing the Alliant SSL Technique which you can find in my signature link -- it costs almost nothing for the 5 full years it reports, and it will keep your FICO score strong!

As for that 30D late, you should try goodwill saturation to get it removed. It never hurts to try once a month until they remove it!

Most folks in the finance industry are totally clueless about credit. Realtors and loan officers are among the worst for giving bad advice. My good neighbor is a realtor and her husband is a banker and the advice they give to people makes me roll my eyes every time. So you're not along with being in the "still learning" column.

Re: How many points could you get when paying off credit card (UTI @ 90%. Will pay it down to 15% UT

Anonymous — Fri, 17 Nov 2017 23:57:39 GMT

Lol!

That is the total truth! I work in the Credit Risk area, but reall want to step in the Credit Analyst feild with the company. Plus it may sound nerdy but I love searching and playing the game of keep my credit score up and challeging myself to see what i can get my credit score to and what cards I can get. Sure I can learn a lot form you!

Re: How many points could you get when paying off credit card (UTI @ 90%. Will pay it down to 15% UT

Revelate — Sat, 18 Nov 2017 00:08:52 GMT

-17 EQ FICO 8

-18 TU FICO 8 (with 2 year old 30D late)

-21 EX FICO 8

$0 to 90.06% utilization on a single tradeline, small aggregate; I haven't done any smaller unit testing on my clean file, previously 15% individual was a non-issue for me and I suspect is for everyone actually.

Hoping to get a better datapoint in January for all the EQ scores but this is a fairly decent sample; when I tried this before on a dirty file in the mid 600's it was only 7 points on EQ FICO 8.

Re: How many points could you get when paying off credit card (UTI @ 90%. Will pay it down to 15% UT

Anonymous — Sat, 18 Nov 2017 00:29:08 GMT

@ABCD I swear almost every thread I look at has at least one well thought out eloquent answer from you in it lol you should win some sort of prize for smartest person on MF, literally every single thing you say is either informative hilarious or both haha and I figured you should get some recognition for that

If you ever need some more data points for your fico simulations I'd be happy to throw some your way!

(P.S. good luck with paying everything down and racking up those points OP!)