New Here - Paid of 100% of Debt Today

[haulingthescoreup]

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@Anonymous wrote:

The debt was (5) revolving credit acounts and (1) CA Tax bill. The ratio of my revolving balances to credt limits was 37%. Does that make sense?

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Yep!

I'm really, really (really really really) terrible at predicting score changes, but going from 37% revolving util down to 1% or 0%, plus only having 1 CC (or 0) report a balance has got to be good --15 points? 20 points? 25? more? (Like I said, I'm pretty awful.)

Not knowing anything other than that you had a buncha lates, but not since 2006, no other negatives, and now minimal util, I'd expect to see 760-770, depending on other things, like how old is your oldest account, what's your average age of accounts, and so forth. Of course, that's pretty much your current score + 20, duh me. (I told you that I was bad at this.)

In regards to the posts about not letting $0 report across the board, it's a scoring quirk that most of us do better to have one revolving account --just one --report a token balance like $10 or $20. Then once it reports, pay it off immediately (horribly easy to forget to do!), so that you don't pay interest and so forth.

It doesn't matter which card you do this on, but it would make sense to use one of the banks that consistently report the balance on your statement date, and do so promptly. So don't use an HSBC/ Orchard bank card (they report the balance as of the end of the month, and they're slow to send it in), and maybe not US Bank cards (they report the balance as of the end of the month, but they do submit it that night.) Also, many American Express cards delay sending in your statement balance for 4 weeks, making your reported balance be nearly a month behind, which can drive you crazy if you're trying to zero it out. Don't use store cards, which sometimes don't generate a statement with a $0 balance, meaning that they might display the same (now paid) balance month after month.

If you have Citi, Chase, BofA, Discover, a biggie credit union, etc., you can use a card from them to do your token balance reporting.

[Anonymous]

You are so helpful, thank you. My oldest account was opened in 1998 and the average age on all accounts is 7 years.

I do have a Chase Visa that I could use to do the "token" reporting - which I have no idea how to do, btw!

[haulingthescoreup]

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@Anonymous wrote:

You are so helpful, thank you. My oldest account was opened in 1998 and the average age on all accounts is 7 years.

I do have a Chase Visa that I could use to do the "token" reporting - which I have no idea how to do, btw!

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All you have to do is go on to your online account 3-4 days before the next statement is set to drop, and pay off all but $10 or so of your balance. Then sit back and wait, let the statement generate, and confirm that it shows the $10 or whatever. As soon as you see it show up on the statement, pay it off.

Do the same thing with you other cards, but pay them down to $0, so that a $0 balance due shows when their statements generate.

The scoring formulas penalize consumers who have balances show up on our credit reports. These balances, in almost all cases, are the balances that display on our statements. (This drives what is known as revolving util, or utilization: the balances reported divided by credit limits.)

If you control the balance that is reported, that means that you can use your credit cards all you like, without being penalized in your FICO scores. However, it does mean that you have to be able (and willing) to PIF --pay in full --every month. But you should be doing this anyway, both to avoid paying interest and also to escape being in the power of your lenders. I never advocate going into debt, but if I can benefit by using plastic (rewards, consumer protections, record-keeping, convenience), I will certainly do so.

Now that rewards cards are the norm, many of us put quite literally every purchase through our CC's, and we wind up making money, or at least saving some of the money that we pay on sales taxes, etc, via rewards. The last time that I pulled cash from the ATM was six+ weeks ago, and I still have cash in my wallet.

FICO scores are created off the info that is reported to the credit bureaus. If you control the info (by paying off your balances early, in this case), you can control your FICO scores, at least partially.