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Paying Down Revolving Credit

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Paying Down Revolving Credit

I am in the process of trying to get approved for my home mortgage and due to new FHA standards, my mid score of 627 is no longer high enough - it needs to be at 640 or higher.  My lender advised me to pay down as much credit card debt as I could last month to try and bump up the additional 13 points I need.  My total credit between all cards was at $4500. I did have $4176 utilization between those cards and paid it down to $3147 over the course of the month.  The problem is I haven't even seen a 1 point improvement on my score and the balance changes have been posted to my credit report. 

 

Why would my debt to limit decrease of over 20% not have made a difference on my score?  I am really confused.

Message 1 of 9
8 REPLIES 8
Moderator Emeritus

Re: Paying Down Revolving Credit


@mortgagefast wrote:

I am in the process of trying to get approved for my home mortgage and due to new FHA standards, my mid score of 627 is no longer high enough - it needs to be at 640 or higher.  My lender advised me to pay down as much credit card debt as I could last month to try and bump up the additional 13 points I need.  My total credit between all cards was at $4500. I did have $4176 utilization between those cards and paid it down to $3147 over the course of the month.  The problem is I haven't even seen a 1 point improvement on my score and the balance changes have been posted to my credit report. 

 

Why would my debt to limit decrease of over 20% not have made a difference on my score?  I am really confused.


Welcome to the forums.

 

I suspect the reason you got no bump is because your utilization is still 70% (3147/4500). That is better than the 93% (4176/4500) it was but 70% is still very, very high. Plus much depends on what is still in your reports.

 

But that's just a guess on my part. I might be totally wrong.

 

 

 

From a BK years ago to:
EX - 9/09 pulled by lender 802, EQ - 2/11-816, TU - 2/11-782

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".

Message 2 of 9
New Visitor

Re: Paying Down Revolving Credit

A little additional information - I had contacted a credit repair company (one I had been given good referrals on) and had them do an analysis.  Since I have no collections/late payments/anything negative on my account besides the high credit card balances, they told me that I could see about a 75 point increase by reducing my CC debt $1000.  Does this sound right or were they just trying to sell me their product?

Message 3 of 9
Moderator Emeritus

Re: Paying Down Revolving Credit


@mortgagefast wrote:

A little additional information - I had contacted a credit repair company (one I had been given good referrals on) and had them do an analysis.  Since I have no collections/late payments/anything negative on my account besides the high credit card balances, they told me that I could see about a 75 point increase by reducing my CC debt $1000.  Does this sound right or were they just trying to sell me their product?


Let me ask you this. What can a credit repair company do for you since you have no negatives? You can reduce your utilization yourself absolutely free.  Smiley Happy

 

I would put every extra dollar I could find to work on lowering those balances. Also don't use any of these cards while you are paying them down. Putting new charges on them is like trying to swim upstream.

 

 

 

From a BK years ago to:
EX - 9/09 pulled by lender 802, EQ - 2/11-816, TU - 2/11-782

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".

Message 4 of 9
New Visitor

Re: Paying Down Revolving Credit

I am not using a credit repair company - I had gotten a free analysis from them and because of what they told me (nothing except paying down debt to improve my scores) I decided to do this on my own.  I am not using the cards either, just paying them down. 

 

My question is - at what point should I expect to see any change in my credit score based on the improvements I am making to my revolving debt?

Message 5 of 9
Moderator Emeritus

Re: Paying Down Revolving Credit


@mortgagefast wrote:

I am not using a credit repair company - I had gotten a free analysis from them and because of what they told me (nothing except paying down debt to improve my scores) I decided to do this on my own.  I am not using the cards either, just paying them down. 

 

My question is - at what point should I expect to see any change in my credit score based on the improvements I am making to my revolving debt?


If I make a guess it's just that - a guess. I will leave that to others.

 

But keep being aggressive with that paydown. You will start seeing results.

 

 

 

From a BK years ago to:
EX - 9/09 pulled by lender 802, EQ - 2/11-816, TU - 2/11-782

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".

Message 6 of 9
Valued Contributor

Re: Paying Down Revolving Credit

Maybe the Credit Counseling Agency you talked to meant to decrease your uti TO $1,000 and not BY $1,000...?


CH 7 Filed 7/27/15 Discharged 11/16/15
Starting Score: EQ 620 TU 568 EX 593
Current Score (07/13/16): EQ 674 TU 649 EX 674 (FICO's 08)
Cap1 QS ($5350) (Combined QS and QS1) Discover It ($4100) MilStar ($8,600) Fingerhut ($800)
Off to the garden 05/01/16
Message 7 of 9
Moderator Emeritus

Re: Paying Down Revolving Credit

You may also see something of a score impact if you get the reported balances on one or some of your cards down to zero. 

FICO scores on overall utilization, as well as individual utilization on cards.  In addition, there is a score impact based on number of accounts reporting balances.

 

If you are making an additional paydown, you might want to post your accounts, their CL's, and their current balances.  You'll get some good feedback based on that information if you can provide it.

Just puttin' syrup on something, don't make it pancakes.
Message 8 of 9
Regular Contributor

Re: Paying Down Revolving Credit

I am also trying to get a fha loan, in Nov my scores were in the 680's and 690's then got hit with a collection from Verizon even though I was making payment...then another collection I was hit with from a bankruptcy 3 years ago.  I am now in the mid to high 500's...keeping a high score is like climbing an ice covered mountain...I have have paid both collections in full and I am working with a credit repair to get them removed from my report...I have paid off all my cards except one and I owe them $10, do you know what kind of changes to expect with my score if any...this is truly a depressing situation...

 

Now ths credit repair co. did work on my husband's credit they got at least four accounts deleted and it boosted his score by 130 pts.  I will see if they can remove these negatives off of mine...I did file a dispute stating that the balances were inaccurate and requested an update...I figured it would take less time than waiting for the collection agency to report the debt paid if they do it at all...  Any wisdom you can share would be greatly appeciated!!


Starting Score: TU 545 EQ 575 EX 581
Current Score: EQ 699 TU 670 EX 679
Goal Score: 750


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