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Charge offs had utilization at 120% just paid 5 of 6 now what happens?

Numonik
New Member

Charge offs had utilization at 120% just paid 5 of 6 now what happens?

So I just paid roughly $9,500 out of $10k of charge offs (5 out of 6). Myfico was showing my credit utilization at 120%. I want to buy a house next year and my current credit scores are 628, 618 and 590. I decided since I had the money to pay off all that were 4 years or newer (the one account of $500 I didn't pay falls off next month). 

 

The myfico sim for delinquent pay offs says paying off all but this amount will result in a 40ish point increase across all 3 scores. Is this anyway remotely close to accurate? Honestly I was expecting a decrease in credit score as last year when I paid 2 loans off early my scores dropped Smiley Sad

 

Any feedback is greatly appreciated!

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2 REPLIES 2
OmarGB9
Community Leader
Super Contributor

Re: Charge offs had utilization at 120% just paid 5 of 6 now what happens?

Paying charge offs, especially when they're updating monthly, should yield some nice score gains. It's hard to say exactly how much. But it'll definitely help because the utilization hit will go away, and the updates will stop.

 

By the way, paying off loans actually hurts your scores, believe it or not, because FICO likes you having an open installment loan, ideally at <9% of the original balance.


Last App: 05/30/2021
Capital One Auto Refinance Loan

Currently rebuilding as of 04/11/2019.

Starting FICO 8 Scores:




Current FICO 8 scores:


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House2021
Frequent Contributor

Re: Charge offs had utilization at 120% just paid 5 of 6 now what happens?

I gained very well (19 mortgage score points) when my first $8000 credit charge off was paid, only 5 points after the second $8000 was paid off, so it really depends, but Fico 8 was less generous with the first 8k but gained about 9 on Experian with the second 8000k, but at least it's all been gains I've heard some people had scores drop when they paid charge offs. I still have over 50 percent debt utilization (but actually only $5000) in debt listed that I'm waiting to update to zero, but when I first started this credit journey my Fico 8s were in the mid 500s, they are now 653, 623, and 605, and my mid mortgage went from 595 to 651 last I checked before the last 8k charge off reported paid

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