Is my credit score forever doomed?

[Anonymous]

2 years ago I had a score of ~820 with just a $5000 credit card limit, a few authorized accounts, and perfect paying history. I started applying for a bunch of cards because i needed the money to start a business. My portfolio currently looks like this. All the cards are maxed out.

Amex Premier Rewards Gold

Amex Blue Cash Preferred $13k/$13k

NFCU $25k/25k

NFCU Checking Line of Credit $15k/$15k

Chase Freedom $13k/$13k

Discover IT $4k/$4k

Local Bank card $5k/$5k

Car loan $17k

I've never missed a payment. But I've heard you should never go over 80% limit on any card.

My scores have dropped from 820 to mid 600's. 

If and when I pay my cards in full, will my scores go back up to the 800's or am I forever doomed?

[RobertEG]

Creditors do regular, behnd the scenes soft pulls, which show them your current status on not only their account with you, but with other creditors.

If they see that your % util is very high, both under your account with them and with several other creditors, that is a red flag that you may be living off of credit rather than current assets or income.  That could be a trigger for credit limit decreases.

The impact of credit limit decreases is that, as you pay down the debt, they may also reduce your credit limit, perhaps down to your current balance, to reduce their potential risk.  That prevents you from obtaining a reduction in your % util as you pay down the debt.

My concern would be possible trigger of credit limit decreases based on muliple cards being at or near their credit limit.

I would strive to reduce % util as soon as possible to prevent that damage.

[Anonymous]

Looks to me like a total utilization issue which you control. I would think if you can get those balances down (bigtime 75k), you should recover.....good luck...

[Anonymous]

Welcome to myfico CrazyMF! You need to at least try to bring your utilization down to at least 30% by paying your balances way down & you should see a nice boost to you scores...the maxed out/nearly maxed out cards is killing your scores hope this helps..

[SouthJamaica]

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@Anonymous wrote:

2 years ago I had a score of ~820 with just a $5000 credit card limit, a few authorized accounts, and perfect paying history. I started applying for a bunch of cards because i needed the money to start a business. My portfolio currently looks like this. All the cards are maxed out.

Amex Premier Rewards Gold

Amex Blue Cash Preferred $13k/$13k

NFCU $25k/25k

NFCU Checking Line of Credit $15k/$15k

Chase Freedom $13k/$13k

Discover IT $4k/$4k

Local Bank card $5k/$5k

Car loan $17k

I've never missed a payment. But I've heard you should never go over 80% limit on any card.

My scores have dropped from 820 to mid 600's. 

If and when I pay my cards in full, will my scores go back up to the 800's or am I forever doomed?

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If you pay the credit cards off soon they'll bounce back soon.

But you're at a point that the banks will probably start taking adverse action reducing your credit limits.

So your business better start helping you out.

[Anonymous]

If the only major change to your profile was utilization, say going from 1% to 100% resulted in a score drop from 820 to 650, bringing your utilization from 100% back to 1% would in theory put your score right back at 820.  Of course, that's all things being equal.  Obviously other things have changed over however long that span of time was... your AAoA could have grown (or dropped from opening accounts), inquiries could have been added or aged off, etc.  The basic point here though is that utilization only matters for that moment in time.  So, at the moment you had an 820 score you had great utilization.  With a 650 score, you have maxed out utilization.  As quick as you can achieve great utilization again, you'll achieve that great score again.

As others have suggested, AA could be looming around the corner for you.  If that's the case, it could be much more difficult to bring your utilization back down to an optimal range.  If you can, though, your scores will be back to where they were before you got yourself into trouble with the max outs.