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Wow 34 point increase

Discussion in 'Credit Talk' started by WILLDOGS, Apr 9, 2003.

  1. Apr 9, 2003 #1
    WILLDOGS

    WILLDOGS Well-Known Member

    I just checked privacyguard, and my Privacyguard score went up from 601 to 635 by just having a Zero balance on my first premier card.

    Nice
     
  3. Apr 10, 2003 #2
    debtor_x

    debtor_x Well-Known Member

    Just wondering how your card was being reported before?
    Were you maxed out, and how high was your limit?

    I am going to be doing the same with BofA as soon as tax money comes back, I owe them about 2k on a 3k card.

    DX
     
  4. Apr 10, 2003 #3
    Mycroft

    Mycroft Well-Known Member

    Fantastic!

    In fact, paying off debt is the best way to bring up a credit score.
     
  5. Apr 10, 2003 #4
    ms6073

    ms6073 Well-Known Member

    Yes, but there is a catch! Reducing the percentage of total debt will always raise a persons FICO score and dont misunderstand as I am very strong advocate of the debt free economic model (ala Dave Ramsey). The problem is that in the FICO scoring model, while paying revolving debt balances to 0 does indeed raise your score, depending on a number of other statistical factors, the percentage of increase actually gets proportionaly lower the closer you get to a zero balance benchmark. A person should actually see the highest increase by carrying somewhere between a 15%-25% debt load.

    Once again we need to dispel the notion that FICO scores are indications of a persons credit worthiness when they are in fact more of a credit risk weight scale that lenders use to help gauge a persons credit worthiness. From that standpoint, speaking in very broad statistical terms, FICO considers the risk of a consumer with 0% debt load to be a little higher than that for another consumer with a similar debt structure who carries an average 15% debt load instead.

    Using the FICO simulator at MyFico.com should bear this out. Run the scenarios that calculate score based on paying down revolving debt by using two scnearios, one decreasing revolving debt load to both 15% and another to 0%. Although both scenarios will obvioulsy yield an increase in FICO score, typically you will observe that the higher score/greater increase is reflected in carrying a 15-20% debt load versus a 0% debt load.

    Michael
     
  6. Apr 10, 2003 #5
    kelcol

    kelcol Well-Known Member

    LOL how did you get 1st Premier to report a 0 balance?? Did you over pay the balance? I pay the stupid thing off and of course b/c i paid online I get charged the $7 and of course there is the $5 participation fee...voila...$12 balance! oh how oh did you beat this?? LOL
     
  7. Apr 10, 2003 #6
    WILLDOGS

    WILLDOGS Well-Known Member

    Re: Re: Wow 34 point increase

    LOL, Yup I overpaid by 20 cents...

    I just checked my account online thru the First Premier website again and it shows a balance of $-.20 :)

    Privacyguard is showing the TL on all three CR's as $0 balance.

    Hopefully I can keep it at Zero if I pay the $6 Participation fee quick enough.

    Also, I pay my account thru my Chase on-line banking, so I never pay the $7 fee for paying on-line. Only downside is that it takes about 3 days to process.
     
  8. Apr 10, 2003 #7
    WILLDOGS

    WILLDOGS Well-Known Member

    I have a crappy limit of $350 and my balance was at $216.80 I just paid a lump sum of $217 a couple of weeks ago and Firstpremier just reported it to the CRA for the month of april with a Zero balance.

    I can't wait to start getting some prime cards...almost there...
     

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