Ok, so I have a question. Say my score is 720 with no balances, and then I rack up 75% util and my score drops to 675. If I pay off all balances in one month (so there is no increase in AAoA) Will my score go back to 720? or will it be lower after paying off debts.
Also, what is better to do scorewise, pay down debt all at once, or pay it down each month 1000.....750....500....250....0. Does spreading out payments look better to Lenders doing a manual review?
Thank You
@creditconcept wrote:Ok, so I have a question. Say my score is 720 with no balances, and then I rack up 75% util and my score drops to 675. If I pay off all balances in one month (so there is no increase in AAoA) Will my score go back to 720? or will it be lower after paying off debts.
Also, what is better to do scorewise, pay down debt all at once, or pay it down each month 1000.....750....500....250....0. Does spreading out payments look better to Lenders doing a manual review?
Thank You
To answer the second part of your question: Lenders, of course, would love to see large balances being paid off each month. Of course, they also like to see that you are diligent in your practice of getting out of debt, as well. They would not want you see you with prolonged high utilization and small payments each month ever-so-slowly bringing the principal down. I'm not sure what you meant by the bold above, but paying the balances will have no effect on your average age of accounts. The consensus is that to have the optimal fico score, you would ideally let one card report with a 1%-9% balance while all others are zero. ($1 against all logic rounds up to 1% no matter what. The more cards that report balances points are taken off.)
