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First post and my ugh story

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Anonymous
Not applicable

First post and my ugh story

New poster so hello all.

 

I thought my credit was in great shape.  In past years had always paid cash for everything including my home and cars but decided some years back having a good credit score was probably wise.   About 8 years ago started to add credit and my average age of accounts is 5+ years, oldest 8.5 years and score rose and was fine, good enough to buy a new car 4 years ago for the best rate so 700 or so?  I honestly dont recall as it was 4 years ago.   

 

Couple weeks ago I went in to a dealership to get a new truck and wanted to do a low mileage lease or at least explore that as I drive maybe 4k miles a year on my current paid off but having serious repair issues truck.   Was rather shocked to have the finance person tell me I did not qualify for a low mileage lease.  Turned out my score was 625.  I really did not understand why this was so and began exploring things.  It turns out my wife had been spending a BIT of money and had run our joint credit cards up a LOT over the past 4 years.  Between the wife and I we have 8 CC and 7 store accounts, I say we as they are joint accounts but I don't use them, heck I did not even know we HAD half of them.   I have 3 CC that I use for my business but are Personal not company CC cards and I pay those myself, also have 1 store account.  My CC's had balances of $0 $0 and $3k which was a new recent purchase 1 month ago of 7K and had already paid 4k of it off in the next month and store card $0. 

 

The cards my wife used on the other hand were all high.....some were in the 95-99% UTI range and overall UTI across all the cards was over 60%.  I was not real happy.   My fault for being a rather hands off the home finances person.  We had a long chat and it won't happen again, why she did not tell me about it long ago is beyond me.  No not drugs or anything, just buying expensive items.....like a 1k pair of shoes.   It really is my fault for not being more diligent, lesson learned, won't be repeated.   The debt she had run up was 38k combined in CC and store cards.  This morning I paid off 30k of that debt, which I did not enjoy at allSmiley Happy it is all the money I had available which I took from a reserve fund I keep for my business (farm) purchases, that 30k was earmarked for a new 35k tractor, was so close but such is the way life goes.  I can nurse the old tractor along for another year till the reserve fund builds back up.  That leaves 8k debt and she is responsible for that, she works and makes 50k a year so should not be difficult.   She will pay what is left off in 6 months.

 

Paid off 4 of the joint CC cards in full and reduced the last remaining joint CC from $7900 (8k limit) to $1,000  now, it had lowest APR.   Paid off all but two store accounts and remaining ones paid down from 9k to 5k and the other account paid down from 6k to 3k left.  

 

No lates on our record at all.  100% on time payments.  4 inquires on record.  We have not applied for new credit in a couple years. No derogatoriness or liens on the record.  The total credit line across all the CC/ store accounts is like 50-60k?  Not sure on that one as never added them up.  We have no mortgage on our home / land.  We do each have a car loan hers 3 years old 2 years to go and mine 4 years old 1 year to go.  We are both right side up in the cars though if that matters at all.  I know my paying off the 30k will lower the UTI to under 25% though at least. 

 

Just curious what thoughts are on how much of a credit score increase we might expect?  More importantly how long till we see that increase and will it be all at once or spread out over several months?  The reason I ask is the truck I want to lease has a special deal that expires mid April.   

 

I know this was long so if you got to the bottom thank youSmiley Happy  

Message 1 of 25
24 REPLIES 24
LionLaw
Frequent Contributor

Re: First post and my ugh story

Lowering your overal utilization from over 60% to under 15% will make a big difference.  It's hard to predict exactly, but based on the other details you've given, I would expect that you'll go from 625 to over 700.

 

If you want to further lower your utilization, you should see if you're eligible for any credit limit increases on any of your cards (without a hard inquiry, of course).  If you could raise that $60,000 in total credit limits to over $80,000, that could drop your utilization to under 10%, which would boost your score even further.

 

This is a tough situation, but it's a story that we've heard many, many times over the years on these boards.  Going forward, you should keep a close eye on your credit reports.  Sites like Credit Karma and Credit Sesame will be able to give you free regular updates on everything on your credit report, so if any new accounts get opened, or if the balances on any of your existing accounts start creeping up again, you will know right away.

Message 2 of 25
LionLaw
Frequent Contributor

Re: First post and my ugh story

One other thing, since you asked: the change in your FICO score from reducing utilization happens as soon as your credit card issuer reports your new balance to the credit reporting agencies.  Usually, this happens shortly after your statement cuts every month, but some banks will report instantly any time you pay a balance down to zero.  But there's no historical component to the utilization portion of your FICO score; only your currently reported utilization matters.

Message 3 of 25
thornback
Senior Contributor

Re: First post and my ugh story

Hi Movement_is_energy,   Welcome to the forums! 

 

Wow..  Glad you had some funds reserved (even if meant for a different purpose)! 

 

You'll see your scores increase from the lowered utilization as your cards post their new balances.   So check your statement closing dates for each card --  creditors report to the bureaus after that date, so you should see them update on your reports 2-3 days after the statement closing date.   Each time a card reports a lower balance, your overall and individual utilization will be positively affected and you should see your scores increase after each posting so long as the reduced balance crosses below one of the utilization thresholds  (88.9%, 68.9%, 48.9%, 28.9%, 8.9%).   By the end of March, all of your new balances should be updated on your reports and you'll see the cummulation of points gained.    Going from 98%+ to 25%  could easily yield 80-100+ points assuming all else remains the same.   You could  total up your credit limits and balances (after payment) to determine what your actual utilzation will be - ensuring it will be below the "safe" 28.9%.  -- just divide total balance / total credit limit.  

 

FYI: Overall utilization below 8.9% with individual utilzation below 28.9% is ideal for scoring purposes.

 

After everything updates,  I'd suggest purchasing a one-time 3-bureau report from myFICO.  It'll be worth the $60 to see your updated FICO scores (including your enhanced FICO Auto scores) from all 3 bureaus so you know where you stand when going back to app for the lease --  the one time myFICO purchase will actually give you all 28 versions of your FICO scores.    

 

Also -- the previous poster mentioned using a site like Credit Karma to monitor your reports on a weekly basis.   Credit Karma is free resource for monitoring two of your three reports (Transunion and Equifax) -- just ignore the scores provided because they are not FICO scores.   But for report changes / alerts - it's a great, free resource.    

Personal Aphorism:"Forget What You Feel, Remember What You Deserve"
Starting FICO 8s | 09/2017: EX 641 ✦ EQ 634 ✦ TU 647
Current FICO 8s | 04/2022: EX 796 ✦ EQ 793 ✦ TU 790
Current FICO 9s | 04/2022: EX 790 ✦ EQ 788 ✦ TU 782
2022 Goal Score | 800s

My AAoA:
4.6 years not incl. AU / 4.9 years incl. AU
My AoOA: 9.2 years not incl. AU / 11.2 years incl. AU
Inquiries: EX 0/12 ✦ EQ 0/12 ✦ TU 0/12
Report Status: Clean
Garden Status:  


Without patience, we will learn less in life. We will see less. We will feel less. We will hear less. Ironically, rush and more usually mean less.
Message 4 of 25
Queen_Etherea
Valued Contributor

Re: First post and my ugh story


@thornback wrote:

 

After everything updates,  I'd suggest purchasing a one-time 3-bureau report from myFICO.  It'll be worth the $60 to see your updated FICO scores (including your enhanced FICO Auto scores) from all 3 bureaus so you know where you stand when going back to app for the lease --  the one time myFICO purchase will actually give you all 28 versions of your FICO scores.    

 

Also -- the previous poster mentioned using a site like Credit Karma to monitor your reports on a weekly basis.   Credit Karma is free resource for monitoring two of your three reports (Transunion and Equifax) -- just ignore the scores provided because they are not FICO scores.   But for report changes / alerts - it's a great, free resource.    


Honestly, he's better off doing the $1 trial with Experian. You get all 3 credit bureau scores for $1 instead of paying $60 for the exact same thing. Just be sure to cancel the trial before the 7 days and you're good to go! Even then, it's only $30/month and you get to pull all 3 bureau's each month, plus get your EX score updated daily. You even get all those other scores like mortage, auto, etc. I love my EX app and check it every morning with my coffee. Smiley Very Happy

I think I've found the sacred map that may lead me to this garden everyone keeps talking about.



Officially collection free as of 3/19/19!!
STARTING SCORES: 377 (11/2013) & 580 (3/2018)
Message 5 of 25
Anonymous
Not applicable

Re: First post and my ugh story

Thank you all, very helpful and much appreciated.  

 

I had NO idea that the utilization is a moment in time, for some reason I thought it was viewed historically so a big drop now would be weighted against it being so high for 3-4 years.   So that is GREAT news.

 

I just purchased a joint / family account at myFico and I will be watching the report like a hawk.  I am sure though the wife won't make the same mistake.  It had her under a LOT of stress and she was trying to pay them down it was just a deep hole for a 50k a year salary.  She had managed to pay one store account down from 4k to $300 but that took a year....at that rate it would have been a LONG climb out.   She had quite a few months back stopped using the CC accounts.   So I am confident this was a one time and now life lesson learned thing for her.  

 

Does anyone know if the MyFico score gets updated daily? weekly? Monthly?  As new info comes in?  

 

Yes I was lucky I had the cash reserves.  I probably would have pulled the trigger on the new tractor in May and then would have been in a lot worse circumstances for paying down the debt, would have taken me at least a year to do so.

 

Does anyone happen to know in general the score needed for a low mileage lease?  I know it needs a higher score than a normal lease.  I should have asked the dealer but was a bit rattled at that moment in time and didn't.  

Message 6 of 25
thornback
Senior Contributor

Re: First post and my ugh story


@Queen_Etherea wrote:

 

Honestly, he's better off doing the $1 trial with Experian. You get all 3 credit bureau scores for $1 instead of paying $60 for the exact same thing. Just be sure to cancel the trial before the 7 days and you're good to go! Even then, it's only $30/month and you get to pull all 3 bureau's each month, plus get your EX score updated daily. You even get all those other scores like mortage, auto, etc. I love my EX app and check it every morning with my coffee. Smiley Very Happy

I suggested myFICO because it will provide auto scores for all 3 bureaus-  which is what will be helpful for the auto lease sought.   The EX app is fantastic- I use it, but it only provides enhanced FICO scores for EX, not EQ / TU ( only FICO 8 for those two).  This is why I suggested OP only purchase a *one-time* 3B from myFICO.

 

But yes, OP -   Experian.com  offers daily Experian reports and Experian FICO scores (which is awesome) for, I believe $24.99 per month.   You can opt for their higher tier membership (CreditWorks Premium) to also receive monthly Transunion and Equifax FICO 8 scores and reports - but you will not receive the other FICO versions for TU and EQ through this service.  This is a great, cheaper alternateive to myFICO if you are not applying for anything (like a mortgage or auto) and don't really need to know your other enhanced FICO scores. 

Personal Aphorism:"Forget What You Feel, Remember What You Deserve"
Starting FICO 8s | 09/2017: EX 641 ✦ EQ 634 ✦ TU 647
Current FICO 8s | 04/2022: EX 796 ✦ EQ 793 ✦ TU 790
Current FICO 9s | 04/2022: EX 790 ✦ EQ 788 ✦ TU 782
2022 Goal Score | 800s

My AAoA:
4.6 years not incl. AU / 4.9 years incl. AU
My AoOA: 9.2 years not incl. AU / 11.2 years incl. AU
Inquiries: EX 0/12 ✦ EQ 0/12 ✦ TU 0/12
Report Status: Clean
Garden Status:  


Without patience, we will learn less in life. We will see less. We will feel less. We will hear less. Ironically, rush and more usually mean less.
Message 7 of 25
thornback
Senior Contributor

Re: First post and my ugh story


@Anonymous wrote:

Thank you all, very helpful and much appreciated.  

 

I had NO idea that the utilization is a moment in time, for some reason I thought it was viewed historically so a big drop now would be weighted against it being so high for 3-4 years.   So that is GREAT news.

 

I just purchased a joint / family account at myFico and I will be watching the report like a hawk.  I am sure though the wife won't make the same mistake.  It had her under a LOT of stress and she was trying to pay them down it was just a deep hole for a 50k a year salary.  She had managed to pay one store account down from 4k to $300 but that took a year....at that rate it would have been a LONG climb out.   She had quite a few months back stopped using the CC accounts.   So I am confident this was a one time and now life lesson learned thing for her.  

 

Does anyone know if the MyFico score gets updated daily? weekly? Monthly?  As new info comes in?  

 

Yes I was lucky I had the cash reserves.  I probably would have pulled the trigger on the new tractor in May and then would have been in a lot worse circumstances for paying down the debt, would have taken me at least a year to do so.

 

Does anyone happen to know in general the score needed for a low mileage lease?  I know it needs a higher score than a normal lease.  I should have asked the dealer but was a bit rattled at that moment in time and didn't.  


It's not daily -- myFICO will update your FICO 8 scores whenever an alert is triggered due to a change on your reports -- so each time a balance is decreased / increased, a new account appears, etc., you will receive an alert and an updated FICO 8 score for the bureau had the change.   The enhanced scores (mortgage, auto, FICO 9, and bankcard) will only update when a new 3B report is pulled.  So if you have a monthly subscription, a new 3B will be pulled monthly; if quarterly, then a new 3B will be pulled quarterly.   

 

I, unfortunately, do not know anything about the type of scores required for a low mileage lease...   You could post a new topic in the 'auto' section and wait for someone more knowledgeable to chime in. 

Personal Aphorism:"Forget What You Feel, Remember What You Deserve"
Starting FICO 8s | 09/2017: EX 641 ✦ EQ 634 ✦ TU 647
Current FICO 8s | 04/2022: EX 796 ✦ EQ 793 ✦ TU 790
Current FICO 9s | 04/2022: EX 790 ✦ EQ 788 ✦ TU 782
2022 Goal Score | 800s

My AAoA:
4.6 years not incl. AU / 4.9 years incl. AU
My AoOA: 9.2 years not incl. AU / 11.2 years incl. AU
Inquiries: EX 0/12 ✦ EQ 0/12 ✦ TU 0/12
Report Status: Clean
Garden Status:  


Without patience, we will learn less in life. We will see less. We will feel less. We will hear less. Ironically, rush and more usually mean less.
Message 8 of 25
Anonymous
Not applicable

Re: First post and my ugh story

Thank you.  The family plan is quarterly so that will be the case.  I saw the single plan you could do quarterly or for a higher fee monthly but on the family plan there was no option for monthly reports.   As long as the plan I have now at myFico the credit score changes as the CC companies and store card companies report the lower utilization and or payoffs I think that is all I really need watch then?   

Message 9 of 25
thornback
Senior Contributor

Re: First post and my ugh story

The updates from the balance decreases will let you know where your FICO 8 scores stand --- 

 

Do you know which score the dealer was using for your lease application? If you received any paperwork from the denial, it should tell you which score version and credit bureau was used -- this is the score you need to watch.  Most auto lenders use auto enhanced FICO scores which are different than FICO 8 scores.    If you don't have any paperwork indicating which score was pulled, you should be able to call the lender and ask..  It would benefit you to know.   But generally, your FICO auto scores respond to utilization changes so there should be significant increases there.    

 

If you find out which bureau and score version the lender uses, then could opt to purchase a new report for just that bureau  (I think it's $19.99 for a 1B report)  and see your updated auto scores that way before you re-app.   NOTE: If your lender happens to be using the Experian FICO Auto score, then just sign up for the $1 trial Experian before you app for the lease to get that score and cancel before the trial ends.    

Personal Aphorism:"Forget What You Feel, Remember What You Deserve"
Starting FICO 8s | 09/2017: EX 641 ✦ EQ 634 ✦ TU 647
Current FICO 8s | 04/2022: EX 796 ✦ EQ 793 ✦ TU 790
Current FICO 9s | 04/2022: EX 790 ✦ EQ 788 ✦ TU 782
2022 Goal Score | 800s

My AAoA:
4.6 years not incl. AU / 4.9 years incl. AU
My AoOA: 9.2 years not incl. AU / 11.2 years incl. AU
Inquiries: EX 0/12 ✦ EQ 0/12 ✦ TU 0/12
Report Status: Clean
Garden Status:  


Without patience, we will learn less in life. We will see less. We will feel less. We will hear less. Ironically, rush and more usually mean less.
Message 10 of 25
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