@tmacar wrote:
I recently paid my revolving debt to credit ratio down from 81% to 15%, and was waiting for the new balances to get to my credit reports. A few days after making the last payment, and way before anything could have been reported, ScoreWatch sent me an email telling me my score had gone from 638 to 658.
I went to the simulator to see what would happen after all the new balances got reported, and it said my score would go to between 728 and 768. I have heard from numerous sources that once the FICO gets above 720, one will usually be approved for anything he applies for, so getting to at least 728 is very important to me.
However, I recently got a $2500 signature loan from my credit union, and Equifax just told me it has gotten on my report. Is this going to hurt my score? I know opening a new revolving account will usually result in a score drop. Will a new installment account do the same thing?
Also, I just paid off another installment loan, from a consumer finance company, a couple of months early, and that should be getting reported any day now. I have, in effect, traded an old consumer finance loan for a new credit union loan, with about $20 less for a monthly payment on the new loan. Will there be either a net gain or a net loss in my score after both of these changes get reported?
If you're already getting score jumps, it sounds like at least one of your paid-down cards has updated. What did Scorewatch say was the reason for the jump?
I'd say that you're going to get a very temporary drop from the new loan, although I'd guess closer to 5 points, based on where your scores currently are. It will get buried in the overall improvement resulting from your lowered util. You might want to make an immediate payment on the new signature loan, if you can, as a loan at 100% gets FICO all in a twitter. But you can also just wait to make your payments on schedule. I got a negative for a new car loan being at high util (100% ), but it went away once the first schedule payment was reported.
Congrats on getting on top of your util! Keep it stomped down, with the next goal to go under 10%, with only a few cards (less than half) showing a balance. RobertEG will holler at me for saying that, because as he so rightly points out, this fine tuning is only needed when you're planning to apply for something. But I think that it's a good habit to get into, and if an opportunity pops up suddenly, I like having my scores up as high as I can get them, so as to be ready for anything. And even though util is the most easily fixed issue, there is still a built-in delay, as you are experiencing, involving the creditors reporting the new balance to the CRA's, and then the CRA's putting down their coffee cups and brushing the doughnut crumbs off their keyboards and entering the updated info on to your reports.
edit: gah, stupid percentage mark + close parenthesis = smiley
Message Edited by haulingthescoreup on
05-10-2008 07:28 AM
* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit?
FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007