Hi there, I'm a newbie so I'd really appreciate any answers you guys have. I have several credit cards that I'm planning on paying off this summer. They each have a few thousand dollars on them. How much will my score increase and how quickly is this reflected on my credit report? Obviously just an approximation is fine, I'm wondering if it'll be within a few months or longer and if it will go up a hundred points or so? Thanks!
I suggest you not complety close them if they have any history,for some reason scores are not going up very quickly right now.It will take 1 or 2 cycles to see any effect.I have a couple that hasn't reported in 3 months.
Well, unless you're getting a BK7, some collection accounts, and some late pays removed, I wouldn't expect a jump of "a hundred points or so" for maybe a year. Utilization is just one factor used in computing your score. Paying down/off credit cards (and keeping them open) will help in the short term and that will improve over the long term. Credit history, type of credit usage in the past, number and type of accounts, etc. also play into the score and will not change once you've paid off your cards. Also, late pays, collection entries, judgments and bankruptcies also affect your score and they won't be affected by paying off your cards either. Also (again), I've found that it's interesting how getting a collection entry will knock your score down by 40-60 points, but removing it causes the score to go up by less than it went down. Over time (3 months, or so) it recovers back to the pre-collection score, but it's not immediate. Also (yet, again), paying off cards and removing collections can cause your score to go up and then drop as you get "rebucketed." This is because your score is computed in relation to other people with similar credit profiles. Making radical changes to your report can cause this profile to change so you become grouped with people who have better credit profiles. I.e. You might be a 750 among 600's but only a 720 among 800's. So it goes.
thanks for the responses. I don't have any late payments anything like, aside from one small debt (<100 - posted about it but no responses) that I'm in the process of clearing up and it's disputed. ccbob: when you say "Credit history, type of credit usage in the past, number and type of accounts," affect the rating, do you mean that the past history of utilization will still play a role for a while on my report? That makes sense. And I assume more accounts is worse but I guess for now, I won't close any. What do you mean by types of accounts though? Are big credit cards worse than store credit cards?
You need a mix of store cards, major credit cards, and even installment loans like a mortgage or auto loan. That's what is meant by mix of credit. It shows you can handle different types of accounts. The length of history is important, too, so don't go out and open a bunch of new accounts.
