topic Re: Credit score gain for paying off high balances in Understanding FICO® Scoring

Credit score gain for paying off high balances

Anonymous — Thu, 16 Jul 2020 00:16:19 GMT

Found this forum earlier this year and have made some great progress in fixing my credit. My question is related to my indiviual usage on my cards. I'll list out my cards and balances:

Credit One VISA 0/750

Credit One VISA 0/500

Capital One QS 0/600

Capital one QSo 0/600

Wells Fargo Platinum 1498/2000

Paypal Credit 1988/2650

Target Red Card 0/500

Best Buy Visa 0/500

Amazon Store Card 0/1700

Discover IT 0/1000

NFCU Secured 0/200

Fingerhut 0/2400

I just paid off both my Wells Fargo and Paypal Credit balances and the rest of my cards are paid off. I have gotten into the habit of paying off my cards before they report so the balance shows as zero. My scores are EX 679 EQ 680 TU 685. My 12 month inquires are 4,6,6. 100% on time payments and a 2 year 1 month AAoA. My youngest is NFCU which is 3 months next week, oldest is Wells Fargo at almost 8 years, my first card I got at 18 years old. I also have 4 loans totalling about $8000 with $5000 left owed between them all. What kind of score jump should I see once these report $0 balances the first week of August? I am hoping to cross into the 700's. I would very much like to get the BCE or BCP with Amex and close some of these starter accounts that won't grow. I am very grateful for everyone on these forums. You all have no idea how much you have helped me in fixing my credit.

Re: Credit score gain for paying off high balances

Anonymous — Thu, 16 Jul 2020 00:31:38 GMT

If all of your cards report zero, you're looking at a 10-20 point loss actually. FICO penalizes a total zero balance. Whatever card you have that reports next, go put a $10 charge on it. Soon as it reports, you'll regain those points (and then some possibly).

Re: Credit score gain for paying off high balances

Anonymous — Thu, 16 Jul 2020 00:38:40 GMT

Oh wow! I did not know about a penalty for all accounts reporting $0. So with those account paid off and me letting a card report a small balance what kind of point gain should I be looking at?

Re: Credit score gain for paying off high balances

AllZero — Thu, 16 Jul 2020 00:57:00 GMT

I would recommend reading the below from ABCD2199
The Truth about Credit Card Utilization
My 11 Rules to Credit Rebuilding
FICO Score: What to pay down first?

From Birdman7
General Scoring Primer and Version 8 Master Thread rev.5.17.20

Re: Credit score gain for paying off high balances

Anonymous — Thu, 16 Jul 2020 01:40:34 GMT

You're going from an aggregate 26% usage to something less than 1%, plus getting to AZEO. I think a safe bet is 10-15 points for crossing the 8.9% scoring threshold. Presence of derogs and possibly your age factors may alter that somewhat.

Be sure the card with a balance is a major bank card, not a CU or store card, for best results.

Re: Credit score gain for paying off high balances

Anonymous — Thu, 16 Jul 2020 01:43:37 GMT

No derogs thankfully. I was hoping for more than 10-15 points since I have two accounts going from 75% to 0% utilization.

Re: Credit score gain for paying off high balances

Anonymous — Thu, 16 Jul 2020 01:46:06 GMT

You may go higher than that - everybody's profile is unique. Typical gains for an aggregate threshold crossing are 10-15. By dropping two cards through multiple breakpoints you may gain more. I'm guessing on the conservative side to play it safe

Re: Credit score gain for paying off high balances

KLEXH25 — Thu, 16 Jul 2020 03:47:56 GMT

My guess is that you can see a pretty nice score gain (20+ but that's just a guess). The 12 month inquiries refers to new inquiries in the past 12 months or less? You'll see some scores gains when they actually age 12 months or more, so younger than that will keep your score down a little. Any lates / derogs?

Just make sure one of those cards reports a small balance and you'll find out soon enough!

Re: Credit score gain for paying off high balances

NRB525 — Thu, 16 Jul 2020 05:11:02 GMT

Two cards at 75% utilization is hurting. As noted make sure at least one card reports something.

You should see a score bump, please report back with results.

Once you get overall utilization down like this, my opinion is you will see less benefit on FICO 8 by striving to get all but one to zero. Letting small utilization balances report on some cards shouldn't be a significant hit to scores, and is easier to maintain.

Re: Credit score gain for paying off high balances

Anonymous — Thu, 16 Jul 2020 11:23:51 GMT

Yeah, going from AZE2 to AZEO won’t do much with the number of TLs.

But, 1 ag threshold, 3 ind thresholds on 2 cards. Clean/thick/aged/new account? You should be north of 700. Im gonna guesstimate ~25 points +\-8 points.

Re: Credit score gain for paying off high balances

Anonymous — Thu, 16 Jul 2020 12:53:12 GMT

Don’t leave us hanging, let us know what the score change is.

Re: Credit score gain for paying off high balances

Anonymous — Tue, 04 Aug 2020 22:58:43 GMT

Finally update time! So Wells Fargo has not updated my balance so it still shows a 1500/2000 balance but my paypal credit reported as 0/2650 down from 2000/2650. My scores all went from the low 680's to around 705. About a 25 point gain accross all 3 credit bureaus. Overall utl is 12%. I let a small 5 dollar balance post to my NFCU card so once wells fargo updates on the 7th I will be azeo. I look forward to the point gain!

Re: Credit score gain for paying off high balances

Anonymous — Wed, 05 Aug 2020 02:04:13 GMT

Congratulations!!!

Re: Credit score gain for paying off high balances

Anonymous — Mon, 10 Aug 2020 21:00:33 GMT

The final final update! I am officially AZEO. My scores jumped another 20ish points. EX and EQ are 727 and TU is 730. Sadly I tried to apply for BCE with AMEX, my first amex card, but was denied due age of accounts and inquires, no Prequal, cold applied. BUT! I was approved with a soft pull for the BB&T rewards card SL is $6500!!! By far my highest limit. I'm a little sad about the amex denial but I will now enter the garden for a while. I do hit 91/3 with NFCU in a couple weeks so maybe I'll try for that second card but until then I'm gonna garden.

Re: Credit score gain for paying off high balances

Anonymous — Mon, 10 Aug 2020 22:04:53 GMT

Congratulations!

Yeah those last points were from utilization not number of accounts with a balance.

Re: Credit score gain for paying off high balances

KLEXH25 — Mon, 10 Aug 2020 23:13:17 GMT

Congratulations on the score gains and new card! Sorry to hear about the AMEX denial. They have really tightened up. I just got the BCP last week after a YEAR of gardening and scores in the 780's and got a $5k SL. Not bad, but I was hoping for higher. 🤷🏻‍♀️

Re: Credit score gain for paying off high balances

AllZero — Tue, 11 Aug 2020 00:13:52 GMT

@Anonymous wrote:
Finally update time! So Wells Fargo has not updated my balance so it still shows a 1500/2000 balance but my paypal credit reported as 0/2650 down from 2000/2650. My scores all went from the low 680's to around 705. About a 25 point gain accross all 3 credit bureaus. Overall utl is 12%. I let a small 5 dollar balance post to my NFCU card so once wells fargo updates on the 7th I will be azeo. I look forward to the point gain!

Congratulations on your score increase!

Re: Credit score gain for paying off high balances

AllZero — Tue, 11 Aug 2020 00:14:21 GMT

@Anonymous wrote:
The final final update! I am officially AZEO. My scores jumped another 20ish points. EX and EQ are 727 and TU is 730. Sadly I tried to apply for BCE with AMEX, my first amex card, but was denied due age of accounts and inquires, no Prequal, cold applied. BUT! I was approved with a soft pull for the BB&T rewards card SL is $6500!!! By far my highest limit. I'm a little sad about the amex denial but I will now enter the garden for a while. I do hit 91/3 with NFCU in a couple weeks so maybe I'll try for that second card but until then I'm gonna garden.

Congratulations on your score increase and approval!