I’m going to pay all of my CC off!

[Anonymous]

I have four credit cards . . Discover 1575 .. Macys 693 .. Home Depot 447 .. NTB 300. I plan to pay them all off by May. My question is will this make my score jump ? My FICO score is 545 and saying I’ll see a 10 point increase. Yes that’s a start but is there any hope that I may have a bigger increase than that? ( 4 late payments on my CR from 2016 which I am working hard to get rid of)

[thornback]

Depends on your utilization. To determine that, we need to know the limits for each card you've listed.

But just to give you an idea, I've gained as much as 29 points when going from 32% to <2% aggregate utilization on a nearly clean report (last, single derogatory was a chargeoff almost 4 years ago). Your gains may be limited due to how recent those late payments are - but there's always hope.

[Anonymous]

91% utilization
Discover 1575/1600
Macys 693/800
Home Depot 447/500
NTB 300/500

[thornback]

And near max on all cards. I can see you getting a larger than 10 point boost. Really hard to guess how much, but I would hope for ~20 points at least. You say the lates are from 2016 -- did they hit the 2 year mark yet?

[Anonymous]

Only the February one. . Others are coming upon June and October.

[thornback]

Hmm yea, those lates are killing you. You will see a decent gain tho. Then probably another boost in june when the one late turns 2.

Just remember, when you pay the cards off, leave one with a small balance less than 8.9% of its limit to squeeze out the most points. Don't let them all report $0 - that will cause you to lose points.

So, 3 at zero and one at less than 8.9%.

[Anonymous]

Thanks for all the advice! Definitely going to put it to use!

[thornback]

Good luck!! And congrats on paying off your debt, I know it's such a relief!

[SouthJamaica]

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@Anonymouswrote:
I have four credit cards . . Discover 1575 .. Macys 693 .. Home Depot 447 .. NTB 300. I plan to pay them all off by May. My question is will this make my score jump ? My FICO score is 545 and saying I’ll see a 10 point increase. Yes that’s a start but is there any hope that I may have a bigger increase than that? ( 4 late payments on my CR from 2016 which I am working hard to get rid of)

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Yes you will get a nice bump.

[Anonymous]

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@thornbackAnd near max on all cards. I can see you getting a larger than 10 point boost. Really hard to guess how much, but I would hope for ~20 points at least. You say the lates are from 2016 -- did they hit the 2 year mark yet?

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The OP would see far more than a 20 point gain.  I'd estimate it to be in the 80-100 point range if he's going from 91% utilization (which is considered maxed out by the FICO algorithm) to 1% (ideal) utilization.  You'd probably stand to gain around 15-20 points on average for every aggregate utilization threshold crossing (some more than others) so at 8.9%, 28.9%, 48.9%, 68.9%, 88.9%... the OP would be crossing all 5 thresholds here if he goes from maxed out to ideal utilization.

The "amounts owed" sector of the FICO pie makes up 30% of your score, meaning in comprises roughly 165 total points.  Revolving utilization constitutes the majority of that pie slice, with things like installment loan utilization being less significant. 

OP, whatever "simulator" told you 10 points is a fantastic reference point for why simulators are absolute garbage and should never be listened to.

Another point worthy of mentioning here is that the OP currently has balances on all 4 of his cards, or 100% of them, which also can impose a scoring penalty.  Once he gets 3 of the cards paid off and he's at 25% of cards with balances reported it's possible an additional score gain may be realized based on the number of accounts with balances reduction as well.