cancel
Showing results for 
Search instead for 
Did you mean: 

Minimal score increase after paying down CC

Moderator

Re: Minimal score increase after paying down CC


@Doc203 wrote:

It only took me a min  - here you go:

 

CardBalCredit LimitReported toAuthorized User
Chase34263500EQYes
Sync/Walmart30393800All 3 
Discover52555500All 3Yes
Chase333500All 3 
Am EX18371950All 3 
Sam's Club29553000EQYes
BP02300All 3 
Chase014400EQ, EXYes
Amazon Store988610000All 3 
Chase610410000All 3 
Citi25672690All 3 
Cap One20652250All 3Yes
Cap One08000All 3 
Ashley Furn13904000All 3 
Cap One19422050EXYes

Lots of replies while I was typing that!

Looks like you are at 53% utilization (rounded up) with 8 of 15 cards maxed out.

 

There is no guarantee that they would drop off of your reports without some additional work by you, but if you removed yourself from the red ones above, that would bring you down to 3 out of 10 maxed out and 43% overall utilization.  If you then brought the remaining maxed out ones down into the 80s at least, you should notice a bit more improvement.

 

Do your $14,400 Chase card or $8,000 CapOne have any balance transfer offers?


Message 11 of 24
Senior Contributor

Re: Minimal score increase after paying down CC


@Doc203 wrote:

It only took me a min  - here you go:

 

CardBalCredit LimitReported toAuthorized User
Chase29753500EQYes
Sync/Walmart30393800All 3 
Discover46755500All 3Yes
Chase333500All 3 
Am EX16581950All 3 
Sam's Club25503000EQYes
BP02300All 3 
Chase014400EQ, EXYes
Amazon Store850010000All 3 
Chase610410000All 3 
Citi22862690All 3 
Cap One19132250All 3Yes
Cap One08000All 3 
Ashley Furn13904000All 3 
Cap One17432050EXYes

Yup, those maxed out cards are what's hurting you, regardless of having other cards at 0%. The one's I've bolded bring your utilization down to 85%, unmaxing those cards. I'd start there. 

Gardening until... April 2019




Message 12 of 24
New Member

Re: Minimal score increase after paying down CC

K-in and Adkins thanks for the help.

 

Both the $8k card and the $14k card I believe will allow for balance transfers. I think I will remove my self from those cards - all except for the $2050 Capital One - I just paid it off too. I am purchasing the property in November and am just trying to get the best score I can for that purchase. 

 

Thanks again

 

 

Message 13 of 24
Community Leader
Super Contributor

Re: Minimal score increase after paying down CC

We do  not in fact know that the back-end FICO 8 algorithm is counting the particular AU card you mentioned as part of your utilization.  If they are not doing so, then paying down a huge amount on that card would not be expected to help your score.

 

FICO 8 has a secret "anti-abuse" module that behaves in unpredictable ways.  It can cause some or all AU cards to be ignore in util calculations.

 

PS.  The front end "summary" page of a credit monitoring tool (including CMTs made by Experian, myFICO, etc.) probably shows you your current CC utilization, and that CMT's calculation may or may not include your AU cards, but that has absolutely nothing to do with whether the back-end scoring algorithm does.  Determining whether a particular AU card is being considered by FICO 8 requires careful testing and most beginners won't know how to do that.

Message 14 of 24
Established Contributor

Re: Minimal score increase after paying down CC


@CreditGuyInDixie wrote:

We do  not in fact know that the back-end FICO 8 algorithm is counting the particular AU card you mentioned as part of your utilization.  If they are not doing so, then paying down a huge amount on that card would not be expected to help your score.

 

FICO 8 has a secret "anti-abuse" module that behaves in unpredictable ways.  It can cause some or all AU cards to be ignore in util calculations.

 

PS.  The front end "summary" page of a credit monitoring tool (including CMTs made by Experian, myFICO, etc.) probably shows you your current CC utilization, and that CMT's calculation may or may not include your AU cards, but that has absolutely nothing to do with whether the back-end scoring algorithm does.  Determining whether a particular AU card is being considered by FICO 8 requires careful testing and most beginners won't know how to do that.


While all of that is true for FICO 8... OP mentioned that this is in preparation for a real-estate loan.

 

As such, AUs will count, as the older FICO models used for mortgage scoring do not exclude them.

 

OP should consider a one-off 3B MyFICO purchase, to get the EQ5/TU4/EX2 scores that will actually matter in this case.

 

EQ8:843 TU8:840 EX8:850 EQ9:850 TU9:850 EX9:850 EQ5:774 TU4:791 EX2:809 - 2018-11-07
Message 15 of 24
Community Leader
Super Contributor

Re: Minimal score increase after paying down CC

Great catch, iv.  Thanks.  I may have missed that because it wasn't in the initial post.

Message 16 of 24
Highlighted
Valued Contributor

Re: Minimal score increase after paying down CC


@Doc203 wrote:

K-in and Adkins thanks for the help.

 

Both the $8k card and the $14k card I believe will allow for balance transfers. I think I will remove my self from those cards - all except for the $2050 Capital One - I just paid it off too. I am purchasing the property in November and am just trying to get the best score I can for that purchase. 

 

Thanks again

 

 


Before you do anything...

 

You need to buy the 3 Bureau Scores here at MyFICO. It costs $60 but will give you about 21 real FICO scores. In these scores will be the mortgage scores. They are the scores that you are interested in and can vary a lot compared to the FICO 08 scores that you get here and elsewhere. Working to raise your FICO 08 scores in some cases can actually lower your mortgage scores. There are certain things that a mortgage score treats differently than a FICO 08 score.

 

The AZEO technique will get you the highest scores and the more that you vary from it, the more your scores will be nicked. AZEO means ALL ZERO EXCEPT ONE. That is, you would like to have all your cards report a $0 balance except one card that reports a balance that is less than 9% of its credit line. You are far from being able to use the AZEO technique so let's see what we can do.

 

  • Any cards reporting more than 80% UTI are considered high risk and will raise red flags. (Probably over 50% on a manual review like a mortgage.)
  • The mortgage scores don't like to see more than one card reporting a balance so you need to pay off as many cards as you can to $0.

So, pull your scores, pay cards down to less than 80% UTI and pay as many cards to $0 as you can.

 

IMHO you have way too much credit card debt to be considering a mortgage at this time unless you and your spouse are high earners. Have you done your DTI calculations? You need to meet the lender's debt to income ratio or you will have a VERY hard time getting a loan.

 

Good luck!


Starting Score: EQ 653 6/21/12
Current Score: EQ 767 5/22/18 - EX 763 5/22/18 - TU 782 5/22/18
Message 17 of 24
Established Contributor

Re: Minimal score increase after paying down CC

I'm by far any type of expert here, but from what I've seen in my own experience and from reading the forums, an AU account does not have the same weight as a normal tradeline in terms of scores, improvements declines. For me when I had no credit cards reporting, then I saw this first hand. My wife got a card and added me as an AU. When it reported she got a 53 point jump, but I only got a 17 point as an AU. Our files are pretty much identical as we have always done joint accounts for credit. We reversed it and I got a card and added here. The gains were not as much as the first one, but the percentages between what I got and she got as an AU where pretty close.

 

I do agree with everyone else that your total utilization is just too high and you probably won't see many gains until that gets lower.

 

Just an FYI and your mileage may not even be close to the same.

Started Rebuild 4/2018: EX 616| TU 604| EQ 621

Current 12/8/18:


Goal Score: 750+
Message 18 of 24
Valued Contributor

Re: Minimal score increase after paying down CC


@Doc203 wrote:

K-in and Adkins thanks for the help.

 

Both the $8k card and the $14k card I believe will allow for balance transfers. I think I will remove my self from those cards - all except for the $2050 Capital One - I just paid it off too. I am purchasing the property in November and am just trying to get the best score I can for that purchase. 

 

Thanks again


Not sure what your options are going forward for paydown. Key points for improved mortgage score from where you are now include:

1) Reducing aggregate utilization to under 29%,

2) Reducing individual card utilizations to under 49% each or under 69% as a start and

3) Reducing # cards reporting balances.

 

Dropping a majority of the AU cards is a good idea followed by paydown of your cards. See below tables for one approach.

 

After removal of highly utilized AU cards. 

CardBalCredit LimitUT%Reported toAU
Sync/Walmart$3,039$3,80080%All 3 
Chase$33$3,5001%All 3 
Am EX$1,658$1,95085%All 3 
BP$0$2,3000%All 3 
Chase$0$14,4000%EQ, EXYes
Amazon Store$8,500$10,00085%All 3 
Chase$6,104$10,00061%All 3 
Citi$2,286$2,69085%All 3 
Cap One$0$8,0000%All 3 
Ashley Furn$1,390$4,00035%All 3 
All Combined$23,010$60,64038%N/A 

 

After subsequent additional paydown

CardBalPaydownNew BalCredit LimitUT%
Sync/Walmart$3,039$1,200$1,839$3,80048.4%
Chase$33$33$0$3,5000.0%
AM EX$1,658$1,658$0$1,9500.0%
BP$0$0$0$2,3000.0%
Chase$0$0$0$14,4000.0%
Amazon Store$8,500$4,000$4,500$10,00045.0%
Chase$6,104$1,250$4,854$10,00048.5%
Citi$2,286$1,000$1,286$2,69047.8%
Cap One$0$0$0$8,0000.0%
Ashley Furn$1,390$0$1,390$4,00034.8%
All Combined$23,010$9,141$13,869$60,64022.9%

 

Another approach if you have less funds is to still get aggregate utilization under 29%. Also shoot for under 69% card utilization on all cards but, further reduce # cards reporting balances to under 50%. 

Alternate subsequent additional paydown

CardBalPaydownNew BalCredit LimitUT%
Sync/Walmart$3,039$600$2,439$3,80064.2%
Chase$33$33$0$3,5000.0%
AM EX$1,658$1,658$0$1,9500.0%
BP$0$0$0$2,3000.0%
Chase$0$0$0$14,4000.0%
Amazon Store$8,500$1,800$6,700$10,00067.0%
Chase$6,104$600$5,504$10,00055.0%
Citi$2,286$600$1,686$2,69062.7%
Cap One$0$0$0$8,0000.0%
Ashley Furn$1,390$1,390$0$4,0000.0%
All Combined$23,010$6,681$16,329$60,64026.9%

 

I think either of the above have the potential of increasing your mortgage score by 50 points, if your file is clean. The mortgage models, particularly EQ, don't like it when a majority of cards are reporting balances.

Fico 8: .......EQ 850 TU 850 EX 850
Fico 9: .......EQ 850 TU 850 EX 850
Fico 4 .....:. EQ 809 TU 823 EX 830 EX Fico 98: 842
VS 3.0:...... EQ 835 TU 835 EX 835
Fico 8 BC:. EQ 892 TU 900 EX 900
CBIS: ........EQ LN Auto 940 EQ LN Home 870 TU Auto 902 TU Home 950
Message 19 of 24
New Member

Re: Minimal score increase after paying down CC


@Thomas_Thumb wrote:

@Doc203 wrote:

K-in and Adkins thanks for the help.

 

Both the $8k card and the $14k card I believe will allow for balance transfers. I think I will remove my self from those cards - all except for the $2050 Capital One - I just paid it off too. I am purchasing the property in November and am just trying to get the best score I can for that purchase. 

 

Thanks again


Not sure what your options are going forward for paydown. Hey points for improved mortgage score from where you are now include:

1) Reducing aggregate utilization to under 29%, individual card utilizations to under 49% each and reducing # cards reporting balances. Dropping a majority of the AU cards is a good idea followed by paydown of your cards. See below tables for one approach.

 

After removal of highly utilized AU cards. 

Card Bal Credit Limit UT% Reported to AU Sync/Walmart $3,039 $3,800 80% All 3   Chase $33 $3,500 1% All 3   Am EX $1,658 $1,950 85% All 3   BP $0 $2,300 0% All 3   Chase $0 $14,400 0% EQ, EX Yes Amazon Store $8,500 $10,000 85% All 3   Chase $6,104 $10,000 61% All 3   Citi $2,286 $2,690 85% All 3   Cap One $0 $8,000 0% All 3   Ashley Furn $1,390 $4,000 35% All 3   All Combined $23,010 $60,640 38% N/A  

 

After subsequent additional paydown

Card Bal Paydown New Bal Credit Limit UT% Sync/Walmart $3,039 $1,200 $1,839 $3,800 48.4% Chase $33 $33 $0 $3,500 0.0% AM EX $1,658 $1,658 $0 $1,950 0.0% BP $0 $0 $0 $2,300 0.0% Chase $0 $0 $0 $14,400 0.0% Amazon Store $8,500 $4,000 $4,500 $10,000 45.0% Chase $6,104 $1,250 $4,854 $10,000 48.5% Citi $2,286 $1,000 $1,286 $2,690 47.8% Cap One $0 $0 $0 $8,000 0.0% Ashley Furn $1,390 $0 $1,390 $4,000 34.8% All Combined $23,010 $9,141 $13,869 $60,640 22.9%

 

Another approach if you have less funds is to still get aggregate utilization under 29%. Also shoot for under 69% card utilization on all cards but, further reduce # cards reporting balances to under 50%. 

Alternate subsequent additional paydown

Card Bal Paydown New Bal Credit Limit UT% Sync/Walmart $3,039 $600 $2,439 $3,800 64.2% Chase $33 $33 $0 $3,500 0.0% AM EX $1,658 $1,658 $0 $1,950 0.0% BP $0 $0 $0 $2,300 0.0% Chase $0 $0 $0 $14,400 0.0% Amazon Store $8,500 $1,800 $6,700 $10,000 67.0% Chase $6,104 $600 $5,504 $10,000 55.0% Citi $2,286 $600 $1,686 $2,690 62.7% Cap One $0 $0 $0 $8,000 0.0% Ashley Furn $1,390 $1,390 $0 $4,000 0.0% All Combined $23,010 $6,681 $16,329 $60,640 26.9%

 

I think either of the above have the potential of increasing your mortgage score by 50 points, if your file is clean. The mortgage models, particularly EQ, don't like it when a majority of cards are reporting balances.


Thomas - excellent info... thanks! I can pull off either one of those scenario's, and probably do it this month. Outside of high utilization I don't have any bad maks on my credit - 100% on-time payments etc. Thanks for the info, I will study this a bit. 

Message 20 of 24