Maxed out my credit cards

Anonymous · ‎09-11-2015

Hello, been rebuilding my credit back for about a year now and about 1.5 months ago, I decided to max out my cards to take a trip to Miami for a week; credit limit total was around 3k and I maxed it out; scores were as follows: experian (648); transunion (618); equifax (606); Scores immediately after the maxing out of credit cards dropped to the following: experian (574); transunion (582); equifax (552); I have paid down 1500 of the 3k debt as of today, but only 7% has posted to my fico, making it a 93% utilization. With only these changes, my scores are the following: experian (594); transunion (601); equifax (594); For experian, I gained by 27% of my score; For transunion, I have regained 53% of my score; For equifax, I have regained 77% of my score; Judging by the nice improvements with such little decrease in balances, I am thinking that this may have overall improved my score for the better (Prior to this, the most I have left on my cards has been a 1-5% balance); I will post my updates as I get them. I figured this would be helpful for those wondering how maxing out credit cards affects your credit in the short term (6 months or less); Will I regain all of my points that I lost prior to maxing them out? Will I come out ahead and have higher scores? We shall find out soon enough! Feel free to post your comments.

crrredit · ‎09-12-2015

I tried a similar experiment once, letting balances report on multiple cards. My scores dropped of course. The next month I paid my cards down to exactly what they were two months ago, and my score went back to the exact same scores. So if you're taking bets here, if nothing else changes in your report, your scores will go back to what they were before you maxed out. Your large initial rebound won't continue with each % of Util drop. You may end up slightly higher if a derog in your report ages another month or hits a year old, a newer account hits 3 months of reporting, etc. I would recommend not maxing out any more. Your card issuer might get nervous and start lowering your limit as you pay it down.

newmomnewme · ‎09-12-2015

Good to know. I am working on repaying my maxed out mess over the next 12 months. I too had baddies that aged off at the same time, so I wasn't able to see the total damage from maxing out. Oh, how I wish it was an experiment. lol

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coterotie · ‎09-12-2015

@crrredit wrote:
II would recommend not maxing out any more. Your card issuer might get nervous and start lowering your limit as you pay it down.

Actually I would say the oppsosite will happen. The issuer will see this as responsible and profitable behaviour and will likely give you an increased CL to encourage you to do it again. Issuers make money from useage and balance carry, not from time spent in the sock drawer. At least this is my experience and the experience of many others on the boards.

crrredit · ‎09-14-2015

Maxing out your cards is a recipe for disaster. Lots of people here in rebuilding mode have very small limits and often cycle through their limits several times a month by making multiple payments. The key is making sure it's paid off by the time the statement cuts. That process might help you get a limit increase, but it's not shown to be the only way. Plenty of folks here use their card for just paying a bill or two and also get limit increases. The common denominator is paying it off by reporting time.

Carrying maxed out balances from month to month results in red flags going up at the credit card companies. If they see you are maxing out cards, even if it's not theirs, and not paying it off, they get nervous. If you make minimum payments on a maxed account, they get nervous. If the economy takes a downturn, they get nervous. One late payment could set off a chain reaction of closed accounts and lower limits. And then there's the crazy interest rates being charged and over limit fees when they lower your limit without you knowing and you put some gas in your car. If you must carry over balances, keep them to below 30%. That % won't maximize your FICO score, but it's in the safety zone.

Ask anybody who had a credit card in 2008. Maxing out cards is anything but responsible.

Anonymous · ‎09-14-2015

Ugh,having your limits dropped is the worst. I had ok credit, a few close to maxed out cards but had my oldest, highest limit BOA card still holiding on strong with a 10k limit. I took a new girlfriend to mexico for the weekend and planned on using that card for the room, expenses. When we got to the hotel, card was declined. 10k down to 1500, the balance i owed on it. She had to pick up the tab everywhere it was soooo embarassing.

Anonymous · ‎09-15-2015

@coterotie wrote:

@crrredit wrote:
II would recommend not maxing out any more. Your card issuer might get nervous and start lowering your limit as you pay it down.
Actually I would say the oppsosite will happen. The issuer will see this as responsible and profitable behaviour and will likely give you an increased CL to encourage you to do it again. Issuers make money from useage and balance carry, not from time spent in the sock drawer. At least this is my experience and the experience of many others on the boards.

Try that with AmEx and see what happens....

ralvarez2678 · ‎09-15-2015

@coterotie wrote:

@crrredit wrote:
II would recommend not maxing out any more. Your card issuer might get nervous and start lowering your limit as you pay it down.
Actually I would say the oppsosite will happen. The issuer will see this as responsible and profitable behaviour and will likely give you an increased CL to encourage you to do it again. Issuers make money from useage and balance carry, not from time spent in the sock drawer. At least this is my experience and the experience of many others on the boards.

When i got reapproved for Cap1 card it was for $500 and i used it like my debit card and paid it off everytime i got paid and messing around on Cap1 website i requested an increase and i got increased to $1000 before the 6 month mark. i am assuming it was because i'd pay it down to zero every 2 weeks.