How fast will credit scores jump?

[Anonymous]

Good morning everyone,

First of all, you are all great!  Thanks for all your great advice on this forum.  So I have about $25,000 in credit card debt at the moment.  I have been fortunate enough to get $24,000 recently.  I am going to pay it all towards my credit cards.  I would really like to improve my score and stop paying 25% interest.  I looked at my credit report and also have 4 medical collections on their that I paid to the original hospital, I have the cashed checks to prove it, so I have to figure out how to get those off as well.  Anyhow, my question is, how quickly will my score change and what can I expect it to go up to?  My current score is FICO 573.  I haven't checked the others.  When I look at the analyzer, it says that my history is good, my inquiries are good, and my payments are excellent.  I know it probably is a wild guess, but if anyone has an idea, that would be great.  Thanks again!

[Anonymous]

If you pay $24000 off your $25000 card debt you can expect a considerable jump.

What's your combined Credit Line? If, you were maxed out (or close to), I'd expect a 60 - 75 or more improvement  in your score. This improvement will show as soon as your Credit Card Companies report your balances to the credit bureus, that is, when your last statement closes (that is if you pay off before they close) + 1-2 weeks for some credit card companies and bureus.

I don't know how collections work. I'd presume you will have to talk to the collections representative to assert they will report your payments and remove them, although, they might just not but, as I said before, I am not entirely sure.

[creditbroke]

You can have each credit card company fax you a corrected balance after you pay them. Fax the new balance to each CRA and request they update immediatley because you have a mortgage on hold. This gets updates within 48 hours with the CRA's.

[MarineVietVet]

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@Anonymous wrote:

Good morning everyone,

First of all, you are all great!  Thanks for all your great advice on this forum.  So I have about $25,000 in credit card debt at the moment.  I have been fortunate enough to get $24,000 recently.  I am going to pay it all towards my credit cards.  I would really like to improve my score and stop paying 25% interest.  I looked at my credit report and also have 4 medical collections on their that I paid to the original hospital, I have the cashed checks to prove it, so I have to figure out how to get those off as well.  Anyhow, my question is, how quickly will my score change and what can I expect it to go up to?  My current score is FICO 573.  I haven't checked the others.  When I look at the analyzer, it says that my history is good, my inquiries are good, and my payments are excellent.  I know it probably is a wild guess, but if anyone has an idea, that would be great.  Thanks again!

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Even though the collections are paid they still continue to hurt you. You can try Good Will letters to the hospital in an attempt to have them removed. They are under no obligation to do so but it's worth a try. All they can do is say no. I would guess that if those collections are removed and combined with your CC pay down you should see quite a nice increase in your scores. No one though can say for sure how much.

Good luck on those letters.

From a BK years ago to:
7/09 TU-742 EQ- 779
8/09 TU-765 EQ- 783
9/09 EX pulled by lender 802

You can do the same thing with hard work

Credit Scoring 101
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[WD]

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@MarineVietVet wrote:

Even though the collections are paid they still continue to hurt you. You can ttry Good Will letters to the hospital in an attempt to have them removed. They are under no obligation to do so but it's worth a try. All they can do is say no. I would guess that if those collections are removed and combined with your CC pay down you should see quite a nice increase in your scores. No one though can say for sure how much.

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I thought there are HIPAA regulations in place, that did require "inaccurate" reporting to be removed once the debt has been settled...

i.e. The collection isn't permitted to report information regarding a medical claim, if / once the claim is settled by the patient and the original creditor.

[MarineVietVet]

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@WD wrote:

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I thought there are HIPAA regulations in place, that did require "inaccurate" reporting to be removed once the debt has been settled...

i.e. The collection isn't permitted to report information regarding a medical claim, if / once the claim is settled by the patient and the original creditor.

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You could be 100% correct about that. I don't know. If you are right I will gladly rethink my view and advice on this.

[crivas21]

if you pay down $24000 dls on your revolving debt you can expect  100 points or more in your fico.case and point is me,i just paid dowm almost $10000 of cc debt bringin my utls from 98% to below 1% and i got a 90 point increase in about 6 weeks.good luck!!

[RobertEG]

WOW!

And I repeat, Wow!

If you are currently paying around 25% APR on your existing CC debt of $25,000, that is around 2% a month, which translates to current payments, in interest alone, of at least $500 a month just to stay even. Hard to pay down balances with that simple lost money out of pocket each month.  So, aside from FICO considerations, it is a major financial step forward!

I dont know what your total credit limits are now, and thus cant tell you how much it will improve your % util. But I guess that you are close to max, and this may reduce you from very high % util to under 10% util?

Your score may take up to at least one to two months to clear the hurdles.  Creditors dont report daily to the CRAs, for it costs them money.  They report, on the average, once a month.  Then it has to be received and processed by the CRAs,  Once it is in your credit file as a reported update, it takes efffect immediately in FICO scoring.

If your credit report was otherwise clear of derogs, this could easily have added 100 pts to your FICO score within a month to a month and a half,  But the remaining CAs in your CR still put you in a "dirty credit history" bucket, and thus your increase may be lower.  How much is hard to say.  FICO does not publish their scoring algorithms.

CAs are major CR derogs.  Until cleared, the are dinging you for a minimum of 20+ points.

If the remaining CA derogs can be removed by way of GW deletions, you could be soon approached the 700 threshold.

[Anonymous]

Thanks everyone.  My total CL is $30,500.  I will look into the HIPAA rules about posting a collection when it's been paid and see if I can get those deleted.  I am so excited!  It is a huge relief to not be under the terms of credit card companies anymore.

[Anonymous]

How far will it jump? In three months time I paid off $3k in debt over ~$4k in limits and received 99 points for my effort. If your payment history is fine, and your credit well established, you should definitely see a much higher jump than that. A hundred points would be nothing if the only thing hold you back is that high usage.