Payoff All Debt?

[RSX]

Good work on the paydown

now all the money you were using for minimum payments and all the money lost to interest charges will help build up your savings even faster than the last time you did it

ignore your scores for the next 2 months, as it will take some time for everything to be updated to all the CRAs

just be happy it is gone, and start socking away $ in savings, while putting minimum spend on some cards.  Rotate through them every 3 or 4 months.  Using just a couple at a time and do not overspend on them.  

[HeavenOhio]

Congratulations on the big payoff, @JoeeL.

Watch out for trailing interest on your next statements, and pay those small balances immediately. Doing that will reset your cards' grace periods.

You may run into the "all cards at zero" penalty as your new balances report. Don't worry about that until after your grace periods have reset. This penalty is nothing compared to 650ish scores. Once the dust has settled, allowing a small balance to report on one card will be good for some more points.

Please come back and let us know if you encounter any adverse action after these payments. I'm betting that you won't be hit all that hard simply because most of your limits are low enough that there wouldn't be much room to lower them further.

[FireMedic1]

Congrats @JoeeL . Keep us updated on your score changes once it all settles.

[jcooks]

Letting all revolvers report 0 will result in a penalty, albeit would still be a net positive score vs having very high utilization.  You also want to keep a small balance on a card if you were looking to maximize your score.

[DSTforlife]

Back in March, my sister had high utilization on her cards and paid them down to an aggregate utilization of less than 30%....it was about 30k which she paid.  She has over 10 tradelines, and some of her cards were about 75-80% utilized.  Once she paid them down, the banks did not flinch (Amex, Chase, Citi, etc).  Discover actually increased her credit limit without asking.

YMMV of course, but the point is to not be afraid of what the banks will do.  You now have the opportunity for a second chance and to make better choices.  If the banks CLD you, it won't impact your scores because your utilization will already be well below 10%.  And you will no longer be paying 15-25% interest on 60k in debt.  

Good job to you!!!

[Kforce]

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@HeavenOhio wrote:

Congratulations on the big payoff, @JoeeL.

Watch out for trailing interest on your next statements, and pay those small balances immediately. Doing that will reset your cards' grace periods.

You may run into the "all cards at zero" penalty as your new balances report. Don't worry about that until after your grace periods have reset. This penalty is nothing compared to 650ish scores. Once the dust has settled, allowing a small balance to report on one card will be good for some more points.

Please come back and let us know if you encounter any adverse action after these payments. I'm betting that you won't be hit all that hard simply because most of your limits are low enough that there wouldn't be much room to lower them further.

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^^^ This

Need to get all to zero for a full credit statement cycle.

See each at zero on a statement

This resets the grace period.

Don't worry about the all zero penalty of 20 points for 1 or 2 months

Then in a few if you want to see where your Ficoes are you can do AZEO.

Congrats: It feels good doesn't it ?