Paid off a lot of debt. How will it impact my FICO scores

[Anonymous]

Hey everyone.  I just made payments to various cards to pay off  $45,000 in debt on various credit cards.  I am curious how this will impact my FICO scores for an upcoming home purchase?  My FICO 8 scores were 714,720,713 with utilization between 85%-87%.  Now my utilization will be around 9%-10%.  I have no late payments, no collections, and no public records on my credit.  Longest account is 13 years and average is around 9 years. 

I hope to get to the 760 and above range which seems to be the number needed for optimum mortgage rates.  Is it possible this payoff will get me there or will it take some time?

Thanks for any help you can provide. 

[SouthJamaica]

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@Anonymous wrote:

Hey everyone.  I just made payments to various cards to pay off  $45,000 in debt on various credit cards.  I am curious how this will impact my FICO scores for an upcoming home purchase?  My FICO 8 scores were 714,720,713 with utilization between 85%-87%.  Now my utilization will be around 9%-10%.  I have no late payments, no collections, and no public records on my credit.  Longest account is 13 years and average is around 9 years. 

I hope to get to the 760 and above range which seems to be the number needed for optimum mortgage rates.  Is it possible this payoff will get me there or will it take some time?

Thanks for any help you can provide. 

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It will help your scores a great deal. There's a difference between 9% and 10%, so be sure to make it 9% or less.

[Anonymous]

Congrats on the $45k payoff!  That's got to be a great feeling.

If you're talking overall revolving utilization going from around 85% to around 10%, you'd stand to gain at least 50 points or so IMO.  The gain will be substantial.  The difference between 9.X% and 8.X% however is worth probably another 15-20 points or so.  If taking your debt down just a bit more in order to land yourself at 8.9% or below, I'd suggest doing that to really maximize your score potential.  If you're able to do this, I'd estimate all of your scores to average around 780-790.  Those of course are FICO 8 scores; you'll want to grab your mortgage scores once all of your new [lower] balances report to see where you stand from the eyes of your potential upcoming mortgage lender.