Score Increase from Lowering Util

[Anonymous]

I am working on getting the max possible score over the next month to try for an auto refinance.

Anyway, my situation is that I have a couple very old collections (5-7 years) and a couple about 2-3 years old.  I have a good credit card with perfect history that is 20 months old and another that is 7 months old.  I also have many student loans that range from 6 months to 12 months old.  I am currently working on any possible PFDs for those collections, but not going to count on that.

My current utilization is about 77%.  I just made payments on both cards to bring them down to about 25%, so they will next report those balances.  My question, is that a good balance?  I have read that to max your score, you want 0% on all but one that is like 5-9%.  However, I don't think I'm quite in the category of maxing scores with my poor credit.  Is there much to gain by paying them from 25% down to 10% or would that be minimal?  I would rather hang on to that money until next month in savings if the gain isn't gong to be much.

Thanks!

[pizzadude]

Talk with the bank or CU that you will be using for your refi, they should be able to tell you the rates they offer with the corresponding score ranges.     After your balances are reporting paid down , check your FICO score to see where you land.   Based on that you can decide to either pay more on your revolving debt to increase your score, or keep the money if you are ok with the interest rate as is.

[namvet]

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@Anonymous wrote:

I am working on getting the max possible score over the next month to try for an auto refinance.

Anyway, my situation is that I have a couple very old collections (5-7 years) and a couple about 2-3 years old.  I have a good credit card with perfect history that is 20 months old and another that is 7 months old.  I also have many student loans that range from 6 months to 12 months old.  I am currently working on any possible PFDs for those collections, but not going to count on that.

My current utilization is about 77%.  I just made payments on both cards to bring them down to about 25%, so they will next report those balances.  My question, is that a good balance?  I have read that to max your score, you want 0% on all but one that is like 5-9%.  However, I don't think I'm quite in the category of maxing scores with my poor credit.  Is there much to gain by paying them from 25% down to 10% or would that be minimal?  I would rather hang on to that money until next month in savings if the gain isn't gong to be much.

Thanks

The magic number is 30% or less on your utilization.  Hang on to your money.  Less is always better but 25% is good. 

[Anonymous]

The CU I would be using uses Experian, a score I can't get unfortunately.

[pizzadude]

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@Anonymous wrote:
The CU I would be using uses Experian, a score I can't get unfortunately.

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Ask them to pull your credit a month or so before your want to refi ~ then you can go with their rates as is,  or pay down your balances as needed.   When they pull your score again it should count be scored as a single inquiry by FICO if it is within the 30~45 days scoring window, and assuming that the CU codes the inquiries as AUTO inquiries.

[Anonymous]

Thanks for the input everyone.  Does anyone have any idea what kind of score increase I might see going from 77% to 25%?  I know nobody can really know, but just curious to see some educated guesses from people who know more than me.  Thanks!

[payingoffdebt001]

Have you tried using the Fico Score Simulator?  I dont know how accurate it is -but I too paid down some cards and I'd be happy with even the low end its saying I might receive. 

[namvet]

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@Anonymous wrote:

Thanks for the input everyone.  Does anyone have any idea what kind of score increase I might see going from 77% to 25%?  I know nobody can really know, but just curious to see some educated guesses from people who know more than me.  Thanks!

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Hard to answer but my educated guess would be around 30 points. 

[Anonymous]

I did try the simulator here at myFico.  I simulated paying off all my cards in a month and it said the score would go from 632 up to 632-674.

[namvet]

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@Anonymous wrote:

I did try the simulator here at myFico.  I simulated paying off all my cards in a month and it said the score would go from 632 up to 632-674.

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Better than my guess!   Keep us posted!