topic Re: Paying off credit cards: 75+ points ?? in General Credit Topics

Paying off credit cards: 75+ points ??

Anonymous — Sun, 17 Jun 2007 02:53:55 GMT

Hello all!!

I have FICO scredit scores of 600 / 619 / 629.

I've never been late on any payments, however, my scores are so low because my credit cards were about 95% maxed. Also, I have some open installment accounts open (several student loans in repayment, as well as an auto lease).

As far as credit cards go, here is what my current report looks like as of this week:

Bank of America Visa --> $8055 / $8100 (MAXED)

CitiCard -->                             $6000 / $6600     (ALMOST MAXED)
Wells Fargo -->                       $1500 / $1800     (ALMOST MAXED)
Amex -->                                $2800 / $3000      (MAXED)

Orchard Bank --> $250 / $300 (MAXED)

Capital One --> $475 / $500 (MAXED)

So basically, im about $19,000 out of $20,000 MAXED OUT

A few days ago -- I finally paid down my credit cards !!!!

On about July 2nd, I will be applying for a NINA NO-DOC mortgage, and need a 680 for 5% down!!.. worst case scenario 660 for 10% down - (or i'll have to withdraw my accepted offer on my dream condo)

Here is what my credit card reporting will look like on about July 2nd:

Bank of America Visa --> $7255 / $8100 (ALMOST MAXED)

CitiCard -->                             $200 / $6600        (CLEAR !!)
Wells Fargo -->                       $200 / $1800        (CLEAR !!)
Amex -->                                $200 / $3000        (CLEAR !!)

Orchard Bank --> $250 / $300 ACCOUNT PAID, AND CLOSED

Capital One --> $475 / $500 (MAXED! AHHHH.. it wont show as paid off until 7/7/07 when its reported............ do you guys think this little maxed credit card will hurt me?)

So the question is:

Do you think my credit score will go up 75+ points for paying these cards down?!

Thanks!!!!!

Re: Paying off credit cards: 75+ points ??

Tuscani — Sun, 17 Jun 2007 02:55:08 GMT

Easily... I am guessing 100+ if you can get your util under 10%.

Message Edited by Tuscani on 06-16-2007 09:55 PM

Re: Paying off credit cards: 75+ points ??

Anonymous — Sun, 17 Jun 2007 03:33:39 GMT

As far as the $7255 B of A acct that is still high balance-- I might put $4000 into it to get it down to $3255

The only thing is... I need that $4000 for the 7/6/07 P&S date!! ... so I am going to see if I can knock it to $3255, have that reported to the credit agencies for a higher FICO score...... and then see if I can get a $4000 cash advance back from that CC to go towards the P&S (but im not sure I can get one that high!)

Message Edited by MedfordMan on 06-16-2007 08:33 PM

Re: Paying off credit cards: 75+ points ??

Anonymous — Sun, 17 Jun 2007 05:30:41 GMT

I would think that your scores would drastically improve. However, seeing that the Capital One CL is so low, I would just go ahead and pay $350 to get it down to around 11% utilization. Regarding the Orchard Bank, hopefully this line was openned a long time ago as that could hurt you.

I know someone who got a stated income no doc loan (2/arm). Their scores was around 670-680- no lates but credit history less than 2 yrs. The bank was a little skittish but they did require them to have $4k in the bank and verified etc.

p.s. I hate arms.

Good luck

Re: Paying off credit cards: 75+ points ??

Anonymous — Mon, 18 Jun 2007 01:09:17 GMT

It looks like Im going to have about 71% available credit..... rather than 10% available credit

Do you think my credit score will go up at least 75 points?

Also.. I paid the Orchard Bank $300 CL down to $0... and closed the account.. I had it open about a year... would that actually hurt me? I figured it was just another "account with a balance"... and it had such a tiny CL i didnt need it and it was cluttering my credit report!

Re: Paying off credit cards: 75+ points ??

MM1234 — Mon, 18 Jun 2007 01:58:23 GMT

Since you closed the Orchard you cant do much there but that was a low CL so the Util may should not hurt you.

I paid off all my debt around May 1 on ALL my cards and just this week they are still showing a balance but only $23 bucks each. My point is you may not see a score jump till around Aug 1. Sometimes it takes 2 complete months so hopefully this is ok for you. But I think it has something to do with timing and paying off before the statement dates.

About a score jump. I too was about 90% Maxed and once paid off all to ZERO and my FICOs are currently 180-192 Points higher than last year. I think the UTIL was what did it not so much the time frame of a year. So in your case, you should see nice jump of at least your needed 75 if you paid down that much. Keep us updated. Good Luck.

Re: Paying off credit cards: 75+ points ??

Anonymous — Mon, 18 Jun 2007 05:47:30 GMT

The thing is... Im hoping for a 75 pt. jump on my NEXT credit report (Jul 2ndish)

I hope it happens, otherwise im screwed :-(

I have an accepted offer on a dream condo........ got denied a NINA mortgage because my scores were 600, 619, 629 w/ maxed credit cards (10% credit avail.)...... I just paid the credit cards down (about 70% credit avail)... if paying off my CC's could take me to AT LEAST 660, i'd be ok... because with 660 i could do 10% down.....

I hope it works out! -- what do you guys think??

Re: Paying off credit cards: 75+ points ??

Anonymous — Mon, 18 Jun 2007 06:08:45 GMT

I would borrow some money and get that other card WAAAAAAAAAY down. At least long enough for you get the score up and the loan closed.
IMHO the only way you are gonna see 50-100 points is to get that utl under 10%

Re: Paying off credit cards: 75+ points ??

CreditBob — Mon, 18 Jun 2007 09:18:34 GMT

Here is how you get a higher credit score and unless you have the money now to pay them all down you will have to be patient. When you pay down the total combined revolving debt to 1% then your score will go up a mimimum of 25-30 fico points. Do keep in mind that the fico scoring system looks at what else is on your report such as a bankruptcy, tax lien, late payment, etc. Loans have a lower impact on your score. So just keep making the payments on time on your student loans. I paid off a personal loan and my credit score only went up 3 points. The best thing tht you can do is when you have lowered your balances pull one report & score at MYFICO and see what causes your score to chnage. That is what I have done and it really helps me.

Re: Paying off credit cards: 75+ points ??

Anonymous — Mon, 18 Jun 2007 14:25:00 GMT

Sounds like you need a good loan broker who has experience dealing with rescoring. 30% of your score is based on utilization. If you had a perfect score it would be (850-350)*.3 = 150pts. So you might well get that 100 pt jump, but getting it to update by Jul 2nd, may be impossible. There's sometimes a big lag (30 to 60 days) between pay down and reporting.

With an experience loan broker, he would be able to work it with the lenders to determine your new FICO score before it hits the CRAs. You may have to get each CC to give you current account status (they'll do it).

Re: Paying off credit cards: 75+ points ??

Anonymous — Mon, 18 Jun 2007 15:44:48 GMT

I'm living proof that paying off maxed out cards shoot your credit score way up quickly. However, it takes awhile to report. TU for me was the slowest. I even put in a dispute to try to make it go faster. In a mortgage scenario once the payments have been received by the creditor your lender should be able to have it rescored within 72 hours or less. Hopefully, at minimal or no cost to you. There are no guarantees. I let most of mine report in it's own time and the score kept going up. Not sure what happens when you force it quickly.

Good Luck

Re: Paying off credit cards: 75+ points ??

gringo43 — Mon, 18 Jun 2007 17:28:10 GMT

Rocket is correct...your loan officer or broker can have a "rapid rescore" done with updated balances provided by you CC companies. I usually cost about 30$ per trade line and only takes about 3 days. Good luck!

Re: Paying off credit cards: 75+ points ??

Tuscani — Mon, 18 Jun 2007 17:45:32 GMT

Rapid rescoring works by providing info to the bureaus outside their normal reporting schedule of 30-45 days.

The info provided, on letterhead from the creditor, specifying what action is to be taken (most common are: remove lates, update balance, delete tradeline) is faxed to the bureau (TU, EXP and/or EQ) which then investigates to make sure claim is valid. Tradeline is upated & credit report is rescored. Takes 3-5 days. The costs involved vary... I believe your broker has to initiate the process unless you can get in touch with special handling depts at the CRA.

And remember... There is no guarantee that your score will go up with a rescore.

Re: Paying off credit cards: 75+ points ??

Anonymous — Mon, 18 Jun 2007 23:12:22 GMT

The thing is... I checked to see when the credit card companies report to the agency -- and its pretty much the same day of each month.

For instance, my Wells Fargo Visa always reports around the 13th or 14th of every month (I paid it off by the 11th and it posted by the 12th -- so my statement right now should say $200 balance and that should have been reported to the credit agencies on the 13th or 14th)

My Bank of America MasterCard reports around the 26th of each month, so Im trying to come up with some cash to pay the balance down a little bit, so on my next statement it will have the paid down balance!!

So the 60 days to show up on the credit report thing... im not too sure what you mean....???

Re: Paying off credit cards: 75+ points ??

Anonymous — Mon, 18 Jun 2007 23:50:08 GMT

Do you know if is $30 per each TL in total, or is $30 per each TL for each CRA (90 total for each TL)?

Re: Paying off credit cards: 75+ points ??

mamabear — Tue, 19 Jun 2007 00:09:35 GMT

LadyFico, how much did your score go up? Also, my credit lines are pretty low, like $500. Does it matter if you pay down small cards like that versus cards with high limits? For example, if I had a total revolving credit of 2,000 and paid to $150 versus if it were 20,000 and paid to 1500? Also, someone recommended getting a loan to pay them off. Would that hurt my score? Or would the positive of paying off cards outweigh the negative of a loan?

Re: Paying off credit cards: 75+ points ??

Anonymous — Tue, 19 Jun 2007 06:53:13 GMT

All my cards had low limits. At that time the highest was approx 800 with most around the 300-500 range. Now that credit is improving and I am seeking to transition from sub prime to prime the limits are much higher. This temporarily lowers my score but in the long term it boosts it due to overall util is much lower.