OK, so NOW what to expect???!!!!

[Anonymous]

OK, so here's the deal.  I purchased a new home and moved into it last September.  Not long afterward I realized I needed tools, lawn equipment, medium level repairs and other odds and ends to make the place "liveable" (IOW, some non-essentials such as funiture, shades, etc., etc., etc.).  I was spending money I didn't have...I was spending CREDIT (as do so many others of us here after repairing our FICOs) and yes, I know my mistakes and vow (to myself) not to repeat them.  Bottom line is I was about $25,000 in CC and other (meaning 2 small personal loans).  Of course, I went on an app spree for Home Depot, Lowe's and other various "homey-types" of cards and have probably about 30 >2 yr inquiries and at this time...a 690'ISH (avg of the 3 majors) FICO.

Last week, I took out a $30,000 personal loan at BBVA Compass (17%, 5 yr term).  I paid off ALL credit card balances (I had probably about 12 CC's with balances) and the 2 small personal loans.

QUESTION IS: Without providing too many other data points (b/c I really think I've given all of the most relevant ones to answer), what could I expect to see happen with my FICO in the short-term, mid-term and long-term assuming I stick as closely as possible to the AZEO strategy from here on out?

[Anonymous]

The most important data to provide here to give you a solid answer would be what your individal card balances and limits were before the payoff and where they currently sit.  This will also provide us with the biggest score-impacting factor change, your aggregate utilization before/after.

[Anonymous]

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@Anonymous wrote:

The most important data to provide here to give you a solid answer would be what your individal card balances and limits were before the payoff and where they currently sit.  This will also provide us with the biggest score-impacting factor change, your aggregate utilization before/after.

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@I have $89,000(ish) in unsecured CC limits aggregated (25 CCs and 12 had balances) and paid it all off w/the new CL (personal loan), all cards were either ZERO balance or under 50% except for one which was @ 70% utilization.  I had $1200 total debt between two separate installment loans.  All paid off now - went from four installments to three also, including my car loan.  HTH?

[Anonymous]

Highest card at 70% helps a bit, but what still needs to be told is your aggregate utilization. 

If you had $89k in limits, what was your total in balances?  Take total balances and divide by total limits to get your aggregate utilization percentage "before" and then for your "after" is that percentage now 0% or do you have at least one balance reported, say 1%?  The loans are quite secondary here to the discussion on utilization, as utilization easily impacts your profile 3x-4x as much in this example.

[Anonymous]

28% when I took the plunge.  Now, probably at or below 4%.

[Anonymous]

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@Anonymous wrote:

28% when I took the plunge.  Now, probably at or below 4%.

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You could gain maybe 20 points from crossing the 8.9% threshold in going from 28% to 4% aggregate utilization, then possibly another 10 points in taking a 70% utilization card down to nothing, so my guess would be around a 30 point gain, give or take.

[Anonymous]

You could gain maybe 20 points from crossing the 8.9% threshold in going from 28% to 4% aggregate utilization, then possibly another 10 points in taking a 70% utilization card down to nothing, so my guess would be around a 30 point gain, give or take.

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That would be nice!  Probably over a 3-6 month time period I  assume.

[Anonymous]

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@Anonymous

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That would be nice!  Probably over a 3-6 month time period I  assume.

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You'd actually see the score gain all at once, assuming you paid down your balance(s) all at the same time.

Utilization is a moment-in-time factor that has no memory.  If your utilization drops and will result in a 30 point gain due to that drop, you'd see all 30 points all at once, not over a period of time.

Definitely report back and let us know how your scores improve.

[Anonymous]

Great info and feedback!  Thank you....

Hypothetically, let's say next year I refi this personal loan I used to consolidate my other unsecured loans with a lower interest rate from another lender in awhile (that's the plan, btw)...would it help/hurt/other my FICO score?

[Anonymous]

It could only hurt your score.  If it would and/or how much it does depends on your current installment loan utilization.

A refi involves taking a loan that's at < 100% utilization and replacing it with one that's at 100% utilization.  If the current loan is at relatively high utilization, the refi with respect to installment loan utilization may not be a significant change.  If the loan is substantially paid down, bringing it back up to 100% utilization could hurt some.  It's also worth mentioning that outside of this factor you have to consider the inquiry associated with the loan along with the AoYA drop and potential AAoA drop.