Credit Utilization increase after paying off maxed credit cards?

[sfcastro77]

In January my husband had a heart attack which put him out of work for four months. I found myself using my 7 credit cards to the point where 6 are maxed and my fingerhut is at 20% utilization. I am sitting at 84% total utilization at this point. I am planning on purchasing a car in mid August. I am about to pay off all $1300 next week and $1500 two weeks after in order to completely pay off my credit card debt. I need a score increase to buy my car.

 

My questions:

 

I have seen various websites that recommend you leave <10% on your cards to get the most increase in the score, is this true?

Should I leave only 3 cards at less than 10% and the other 4 at 0?

 

What will help me get the most increase? My EQ (the one my credit union will look at for the auto loan) has plummetted to 560 when it was 630 before my husband had the attack. My credit union will approve a 560 credit score, but will give me a better rate at a higher score.

 

Will the simple fact that I am going from 84% to less than 10% give me a big increase? Has anyone had any experience with their scores jumping and if so by how much after bringing utilization down?

 

I have $3800 in CLs and balances which total $2800. Should I throw all my money to completely pay off or just pay down to 10% utilization?

Edited July 8, 2015 by sfcastro77

[mendelssohn]

1 card at $2 and the rest at $0, and make sure they have updated on your credit reports.

[sfcastro77]

1 card at $2 and the rest at $0, and make sure they have updated on your credit reports.

Thank you that sounds pretty good. I have the report dates and have timed it to be fully reported before my car purchase.

[Jordan0542]

Depending on your file, mendel's advice could boost your score to 650+.

[no1uknow]

How long does it take to boost your score after paying all maxed cards to $0 and leaving 1 at $2?

 

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[tweak]

How long does it take to boost your score after paying all maxed cards to $0 and leaving 1 at $2?

 

Your score will change the day that all the cards have reported the new balances.

[Prime24]

How long does it take to boost your score after paying all maxed cards to $0 and leaving 1 at $2?

 

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Usually a few days after the payment, depending on the issuer.

[haydeno]

Might want to overpay a bit to cover accrued interest that hasn't posted yet otherwise you may find you end up with small balances on all cards next month when statements cut

[Muffy127]

My FICO Scores are TU 652, EQ 592, EX 541. Have about 7-10 cards over or right at the credit limit. Working on paying them down to 30% or less. No late payments in last two years. No collections. 2 years out of discharged ch 7 bk. what kind of scores do you think I will see by cutting my utilization to 30% or less?

[takeshi]

I have seen various websites that recommend you leave <10% on your cards to get the most increase in the score, is this true?

The recommendation is to allow one to report -- not to carry a balance. Make sure you understand the difference. You do not need to carry a balance for scoring purposes. You can pay the statement balance in full and have a balance report.

 

Will the simple fact that I am going from 84% to less than 10% give me a big increase?

Yes. 84% is very high and revolving utilization has a significant impact.

 

How long does it take to boost your score after paying all maxed cards to $0 and leaving 1 at $2?

A score is generated based on report data. If the report data updates then the score will use whatever data is on the report.

 

However, there can be lag with improvements to utilization due to bucketing.

Edited July 9, 2015 by takeshi

[Muffy127]

Takeshi what is bucketing?

[TheScholar]

 

How long does it take to boost your score after paying all maxed cards to $0 and leaving 1 at $2?

 

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Usually a few days after the payment, depending on the issuer.

 

This is so far from correct that I actually just shot out of get on my computer to type a response.

 

You need to figure out when your cards report. In my experience, most of my cards report the balance on my statement and that shows up between 1 and 7 days after my statement cuts on my credit reports. That is to say this:

 

Card #1 has a statement that cuts on July 15th. Whatever my balance is on July 15th will get reported to the credit bureaus. This will be reflected on my CR's somewhere between July 16th-July 22nd depending on the bureau. When you've spent some time following this stuff religiously, you'll know about what to expect.

 

Therefore, if I pay off the balance on Card #1 in full on July 14th, the $0 balance will show on my credit reports within a few days. However, if I wait to pay that card's balance until July 16th, that card won't report at $0 until the next month's statement cuts on August 15th -- meaning it won't be reflecting in my score until August 16th-August 23rd - not necessarily within a few days of my payment. This has been true with most of the major banks.

 

The two exceptions in my experience have been:

 

1) Chase will report any time I pay the balance to $0 -- even in the middle of the cycle.

2) US Bank will report my balance as of the last day of the calendar month (30th/31st) rather than whatever my statement reflects.

 

(those observations are not unique to me)

 

Not knowing your cards and cycles, it's incredibly difficult to tell you when they will report. What we can say is pay them off as soon as you can. Wait until a week after your last statement cuts and pull your report using a free service like CK/CS/etc and see if they show the balances at $0.

 

If you list out the cards you have and the statement close dates, people here could give you a better idea of when to expect what.

[sfcastro77]

If you list out the cards you have and the statement close dates, people here could give you a better idea of when to expect what.

 

1. Capital One (Authorized User) Report date 2nd of each month
2. Capital One (Authorized User) Report date 2nd of each month
3. Capital One (Individual Acct.) Report date 18th of each month
4. Capital One (Individual Acct) Report date 18th of each month
5. Credit One (Individual Acct) Report date 22nd of each month
6. Fingerhut (Individual Acct) Report date 26th of each month
7. FirstProgress (Individual Acct) Report date 23rd of each month

 

My Current Plan: On Tuesday, July 14th, I am going to pay off completely card # 3, 4, 5, 6, and leave the $2 on #7. My payments will total $1500. On Thursday, July 30th, I am going to pay off card #1 and 2 completely for a total $1300. I think this plan will give me the ideal utilization by the time my credit union pulls my credit report on August 13th.

 

What do you guys think about this plan?

Edited July 10, 2015 by sfcastro77

[no1uknow]

I paid off all 3 of my cards and even my Amazon Credit. But then Chase reported early when there was a 150 balance.

 

With all 3 paid off I'll now put $2 on Capital One Rewards card and see what happens.

 

I have one collection I am battling with Progressive Insurance for 469. I canceled the account over the phone but they have no record of it.

[Muffy127]

Did your score go up

 

 

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[sfcastro77]

Did your score go up

 

 

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I barely made the payments yesterday...stay tuned.

[Muffy127]

Ok awesome can't wait to hear how you improve. Best of luck

 

 

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[sfcastro77]

Ok awesome can't wait to hear how you improve. Best of luck

 

 

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I have a big update...see my new Thread!!

[Muffy127]

What's the link to your new thread

 

 

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[sfcastro77]

What's the link to your new thread

 

 

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https://creditboards.com/forums/index.php?showtopic=546497&hl=