My understanding is that aside from bad history, much of the FICO score is based on a ratio of revolving balances to available credit. My question is, how much balance history on revolving accounts is considered in the score? In other words, if paid off a bunch of balances AND the accounts were updated on the credit bureau records, would it take a few months of consistant balances for my FICO score to peak, or would it be apparent immediately when the low ratios are reported? Thanks.
You must take into consideration the fact that ALL credit scores are set up to be anti-consumer and are soley for the use of the credit industry using them. With that said while your plan "may" affect positive changes it can just as easily bring forth negative i.e. by paying off your balances in an attempt to reduce your revolving credit and improve your score you "may" bring about a "too much available credit" response which somehow (yeah I know its ridiculous by thats the way they have it stacked against consumers) brings down your score. Accordingly, I have heard theories about what is the perfect ratio of credit and accounts required to obtain that "magical" high fico score but until sufficient pressure is brought upon the industry to divulge the scores and formulas we're all just whistling in the dark. You may choose to wait until Fannie Mae brings forth their own scoring system which will be inherently more consumer friendly and totally open, as they are disenchanted with the limitations of the current Fico system.
As soon as your new (lower) balances are reported to the credit bureau, THAT Credit Score will immediately change.
The score is generally calculated each time it's requested from the information currently contained in you credit file. Some creditors do not report monthly, so there might be a lag in updating the balances. The 'big' credit card banks (FirstUSA, MBNA, etc.) generally report monthly though.
