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I just paid of my share secured loan and credit card accounts but have a question?

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CJIII29
Regular Contributor

I just paid of my share secured loan and credit card accounts but have a question?

I am wondering would I see a boost in my score since I paid off my accounts.  I would like to be able to save up for a downpayment for a used auto loan.

Chase Slate Credit Card $1500 credit limit Best Buy Credit
Card $2000 credit limit Amazon Store Card $2100 credit limit .

My Fico scores: Experian 710, Equifax, 702, Transunion 716.
Message 1 of 8
7 REPLIES 7
Revelate
Moderator Emeritus

Re: I just paid of my share secured loan and credit card accounts but have a question?


@CJIII29 wrote:

I am wondering would I see a boost in my score since I paid off my accounts.  I would like to be able to save up for a downpayment for a used auto loan.


If you have other installment loans besides the share secured one, shouldn't see any difference.  May see a drop of some amount: FICO apparently likes seeing a Noah's Ark of open accounts (2 revolving, 2 installment) anecdotally.

 

Regarding credit card payment, depends how much and what the before and after picture was: if you were maxxed out on everything and paid down to near zero on a single tradeline or thereabouts (the conventional / general wisdom here which seems to hold for my scoring profile at least) then you'd potentially get a large bump; if you were like me and pretty much clean on revolving accounts, may not get any and hopefully did not pay them all to $0 reported (which is a straight non-trivial negative unfortunately).




        
Message 2 of 8
CJIII29
Regular Contributor

Re: I just paid of my share secured loan and credit card accounts but have a question?

My revolving accounts will report a $0 blance. I dont have any other open installment loans. My next move is to get a used auto loan. Smiley Happy

Chase Slate Credit Card $1500 credit limit Best Buy Credit
Card $2000 credit limit Amazon Store Card $2100 credit limit .

My Fico scores: Experian 710, Equifax, 702, Transunion 716.
Message 3 of 8
notfancy
Valued Contributor

Re: I just paid of my share secured loan and credit card accounts but have a question?

You really don't want all of your CCs reporting 0. One of them needs to report a balance of 1-9% or your score will take a hit. You can let it report, then pay it by the due date and thus not have to pay interest.

625 EQ FICO Current Score: 660 DCU EQ FICO/ 645 Scorewatch EQ FICO , EX FICO 664, TU FICO 737 (08/2014)
Goal Score: 700   Seedling again as of 07/29/14
Message 4 of 8
Revelate
Moderator Emeritus

Re: I just paid of my share secured loan and credit card accounts but have a question?


@notfancy wrote:

You really don't want all of your CCs reporting 0. One of them needs to report a balance of 1-9% or your score will take a hit. You can let it report, then pay it by the due date and thus not have to pay interest.


This, unfortunately.  FICO's a bit dated and $0's across the board is deemed non-use (back from when credit reports didn't include payments made which is a FAR better measurement in my estimation) so if all your accounts are reporting zero, whatever your next up credit card statement is, let a small balance report, and once it lands, go auto shopping.

 

Should be in good shape for the auto loan at that point.




        
Message 5 of 8
CJIII29
Regular Contributor

Re: I just paid of my share secured loan and credit card accounts but have a question?

Do that for another 6 months? It problemly be next year? They say I have to many inquiries in the last 12 months.

Chase Slate Credit Card $1500 credit limit Best Buy Credit
Card $2000 credit limit Amazon Store Card $2100 credit limit .

My Fico scores: Experian 710, Equifax, 702, Transunion 716.
Message 6 of 8
Revelate
Moderator Emeritus

Re: I just paid of my share secured loan and credit card accounts but have a question?


@CJIII29 wrote:

Do that for another 6 months? It problemly be next year? They say I have to many inquiries in the last 12 months.


Oh, I figured the impending car loan was tout suite Smiley Happy.

 

Utilization is generally an instant-in-time calculation: I simply optimize my reports the month before (after testing for me, now only one balance out of my credit cards, or 2 months before in my case as a result of Amex's specific policies if I want something from them) I'm planning to make an application, and don't generally worry about it the rest of the time unless I'm doing some testing.

 

If you have six months while it's not a bad habit necessarily to get into optimizing your report, it's not necessary that far in advance.




        
Message 7 of 8
CJIII29
Regular Contributor

Re: I just paid of my share secured loan and credit card accounts but have a question?

My local credit union has a first time car buyer program so I will check and see how it works.

Chase Slate Credit Card $1500 credit limit Best Buy Credit
Card $2000 credit limit Amazon Store Card $2100 credit limit .

My Fico scores: Experian 710, Equifax, 702, Transunion 716.
Message 8 of 8
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