I have one card that is almost maxed out because of a 3.9% BT. I have another card that I use for day-to-day purchases. I'm getting ready to change which card has the BT. As part of this effort, I paid off the day-to-day card early (before it bills) so it has a zero balance. Then I'm hoping to get the BT to the other card before it closes, so I'll have a zero balance on it as well. I wanted to see how all of this affects my scores. Well, the first card that I paid had a balance of about $1300 last month (that month's purchases). So today it reported with a zero balance and my scores DIDN'T CHANGE. The other card is still maxed. I'm sure when it reports zero that my scores will go up. But I found it interesting that paying off $1300 or so on a $18K card had NO impact at all--not even a point, not on any CRA.
You went from 6% utilization, to 0%. You would think that would get you at least a point or 2. And isn't there something about FICO seeing accounts with a 0 balance as closed? so therefore they do not count for your ratio. I always leave a few bucks on after each payoff just in case it is true.
I don't know--it shows as open, but maybe the zero balance negates that. I think the fact that I have over 50% utilization on one card overrides everything. That is always a negative reason on the reports. I just thought I'd get a point or two for the lowering of overall balances.
I don't know if its true or not... I talked to a mortgage broker a few months back. As a helpful hint he suggested that you send your 0 balance creditors a check for .75 or so resulting in you having a small credit. The company won't automatically refund any amount under 1.00 but the end result will be that it reflects in the fico as "consumer overpays on account". He said its good for a few points.
Having a high balance on any account seems to work against you. Try to distribute the balances so they're fairly even. I've seen all sorts of point drops/gains as I paid off balances in the last year. Got about 100 points by paying under 10% from 90% utilization.
An 8% drop on a card that is almost maxed doesn't have much of an impact on your FICO score. When you play with the FICO score simulator you should notice positive points after 20% to 25% below your total credit limits. 80% and up is usually the score killer on total credit lines. At that point you are in the lowest point category for debt ratio. Also it depends on your total credit history. I'm not surprised at all that $1300 off of your balances didn't improve your FICO score. Should you have received a couple of points? Maybe, but FICO is graded in % categories. Just like in school a 73 or a 77 would still be a C. Basically FICO has given you close to a F in balances to credit limits. The $1300 off of your balances didn't really improve your grade on that variable. Here is an example of someone with total credit lines of $500. FICO 649 Debt $227 Max Cards 589-639 Pay off $1-$30 649-669 Pay off $31-$133 649-689 Pay off $134-$215 659-699 Pay off $216-$227 649-689 Do you see the difference between being close to max. on your cards? If you do the math on % scales it is obvious that you are not rewarded for paying off the $1300 in that situation being close to your credit limits. Sorry if this is long I am FICO crazy. And following this post GEORGE will chime in with his results from FICO and how he was robbed. I always enjoy it though, FICO hates GEORGE.
