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V-Dude

Paying Off at Once - Just a Myth

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Hi there Folks,

 

I haven't been here in a long time, because I mainly never felt I had anything to contribute and my credit is on the straight and narrow.

I have been through most experiences on here from rebuilding, to fighting CA's to being sued and winning. I took a lot of this to heart and went off fighting. 

 

Something I learned many years ago on here was to not pay everything off at once. For example, if you get an inheritance of 20k don't pay off your 10k and two 5k balances at once because your score will actually tank.

 

I do not know if that is still the solid information on here or not, but since that was the word when I was here, I wanted to come here and share this....

 

Recently I was about to pay off approximately 30k among 4 cards. The highest balance was $8,900 with the highest minimum at $200.

 

Remembering what I learned here, I was about to stagger my payments and pay these all off over the course of 3-5 months, but as I was doing the math, I said "F-It" I don't have time for thinking about that, I want these gone. I am sick of it. Let's see what happens anyway.

 

Well guess what? Nothing happened negatively at all. The first month I got a 20 point boost and now on my second month I just got another 33 point boost for a total of 53 points on myfico over 2 months.

 

My point... I saw the opportunity to share a possibly helpful experience, so I just wanted to share this if anyone was in the same boat and contemplating. Naturally your mileage may vary, but that was my experience and I came to the conclusion that paying everything off in full all at once was just a possible myth.

 

Godspeed and keep on keepin' on....

V-Dude

 

 

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Nice of you to come back and post your experience, and it's great to see that you've emerged victorious!

 

I think you are conflating a couple of concepts.  Generally if you have very high utilization on all of your card you are at some risk of being balance-chased (having your limits lowered as your balances fall).

 

Having low revolving utilization is always a good thing, so going from high utilization to low would have the effect you've described.

 

Having 0 balances on every card costs you some points too, but not as many has having high balances in relation to your limits.

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welcome back :wave:

 

the penalty by FICO was with older versions, e.g., Fico 98.

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Good to know...about to be in this exact situation....

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Thanks - I occasionally still lurk but don't post so much because there is so much here, but as I grow and a new experience comes in to play I will post it.

 

Correct - I didn't think of the balance chasing, so I should mention that I don't think I would do what I did if that were the case. During the whole financial thing I was balance chased all the way down. I wanted to keep those limits as high as I could so I was making minimums for what felt like forever.

 

I just did this and my situation is I have it together and it has been for a while. I was going to start spacing it all out and pay things down over a few months but I wanted to "just see what would happen" for the most.

 

Since I made this post a few days ago, I just got another boost and for the first time ever I pushed past 800. Something I should add to that is that I have been in the 700's for a couple of years now. I haven't gotten any real jumps in the past 12+ months, but this just boosted me.  Along the way I even closed a card with a 20 year history. 


( Good Bye Amex - Too many free cards out there. )

 

Ok I am rambling :-) 

 

 

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