Best bang for credit score increase?

[Anonymous]

Hello! 

     I have a $2200 credit card balance on Capital one with a 4500 limit. I want to pay this down to zero in the next two months.

Would it be better in terms of increasing credit score to pay it off in one lump payment, or two split into two or three payments over the next few months. I can do any of the above, just want to maximize any improvement to overall scores as I hope to purchase a home later this summer (if i could ever find one)

Any input would be appreciated. Thank You.

[Horseshoez]

As I understand FICO scoring (which is only moderately well compared to the experts here), you'll get to the same score either way, paying it down over time will just get you there slower.  One other thought, I believe it would be best to NOT pay it off in full if you don't have other credit vehicles with small balances.  Said another way, pay it down to say, $50 and then keep your payments and charges such that you always report a small balance.

Is the CapOne card your only credit vehicle?  If so, you might want to follow the advice of the "experts" here and obtain at least two more cards as well as take out a small personal Credit Builder or Secured Share Loan and then pay it down to under 9%; taking such steps should help your scores fairly significantly.

[4sallypat]

The sooner you get to less utilization, the faster your score will rise.

As @Horseshoez said, keeping it under 9% (overall utilization) is a good idea.

Increasing available credit will help that as well.

For a mortgage loan, it looks better to have different credit: installment loans (personal, auto, debt), as well as a mix of store cards and credit cards.

Check your mortgage scores as they differ from regular FICO scores.

A good mortgage broker can help you pinpoint what you need to do - mine was so good at targeting only 7 out of my 25 credit cards - to pay down in order to increase scores.

Last year when I started looking for a house, my scores were in the mid 600s - now after 6 months of following the broker's advice I am at - mid 700's across all 3 CRA:

• Consolidate credit card debt into a single installment loan (Discover PL).
• Lower card debt on 7 cards (Citi, Chase, Barclays, Discover).
• Pay off auto loan early

[Anonymous]

Agreed with the above except that it's highly advisable to not open any new credit within a year of a mortgage app.

[KLEXH25]

Hi @Anonymous! Is this your only credit card? Or do you have other cards? I would definitely suggest paying the balance off right away. Delaying payment won't have any added benefit. You can keep using the card to let it show a small balance and that your using it, however make sure to pay the balance each time. Also, don't apply for anything new before getting a mortgage.