Credit score question... In February I had $12K in total revolving credit. I had $11K on the cards so I was almost maxed out. On March 15th I paid $5K to my credit cards to increase my available credit to debt ratio to help get my home load in April. Today I found out that American Express canceled my card that I had a $2K credit limit with. I just paid them $1500 (part of the $5k) towards my cards 2 days before they canceled the card. My question: I know when you cancel a card your credit score goes down because your available credit to debt ratio goes down. But next month when they report they canceled my card the other credit card companies will report that I paid down more and have more available credit and that should increase my score. So, now in March. My credit report says I only have 10% available credit on my cards. But in April, even with AMEX canceling my card I will still be at about 30% available credit (give or take). I was hoping for 50% but again AMEX cancel. Will my credit score go up or down even though I paid $5k towards my cards but AMEX canceled my $2K card? -Lars -Lars
It may go down. To maximize credit you need to have about 70% available, and generally anything over 50% utilized makes your score go down.
Interesting. I heard that it is about 1 credit point for 1 percent of debt to credit. So if someone has 80% spent on their credit cards then he will be down 80 points. So now March I only have about 10% available credit, 90% on my cards. And even though AMEX canceled my $2K credit card this month, by chance I sent the cards $5K. So when April rolls around I will have 30% available credit even though they canceled my card and my total available revolving credit line will be lowered. What I don't know is if there is some kind of penalty I get by them canceling the card? Or if the penalty I get is just the fact that lowering my revolving credit puts me closer to my debt that I have on the card. -Lars
