Animator12 wrote:
My score went down over 30 points in July because of a 30 day late credit card payment. I just recently payed off a personal loan (about $3500) and I decrease my only credit card balance from $4500 to $1000 last month and it seems to have had no effect on my scores whatsoever. Can someone give me some insight? It seems like the negative credit affects your FICO scores more quickly than the positive credit. Message Edited by Animator12 on 09-04-2009 06:27 AM
Sorry about the drop. The damage will continue to impact you for at least two years and will slowly, and gradually lessen over time. Yes, it does take a while. Some have had 7 year old collections removed and have seen large gains; it is an indicator that baddies can impact you for a long time. Per the late, be sure to send the creditor a GW letter asking them to remove that late.
Installment accounts have a super small impact per FICO scoring. If you have other loans that are being paid upon, then you wouldn't see any impact. If it was your last one, then there could have been a small score change, up or down. I paid off my last loan in the spring. Pulling my two FICO scores the day before it reported and the day after it reported showed a drop of 5 points on TU and a gain of 7 on EQ. Impact was super minimal.
Congrats on the debt paydown. If this is your only CC, then you'd benefit by adding another 1 or 2. As a general rule of thumb, and certainly not factual since we don't know what the formula is, for every 10% of utilization you pay down, you'll gain about 10 points. Now going from 90% down to 80% won't gain you 10 points, because 80% is bad, but you'll likely gain about 80 points if you go from 90% to 10% with most of the points coming from the 20% to 10% mark. If this $1000 balance card is the only card you have, then your mix of credit is taking a hit. FICO likes to see at least 2 revolving and one charge card, IMO. So, if this CC, for example...without knowing your CL, went from 90% to 10% and you have no other cards, then you won't see an 80 point gain. I'd guess a 20 point gain at best. However, if you had a good mix and did that, then you would see the gain. BTW, you can easily get your scores in the mid to upper 700s with only one CC.
