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Credit score experts.

D

de8212

Diamond Member
What kind of impact would paying off a ~$3200 balance be on your credit score? Just looking for a rough number. 10 points, 20, 50, etc. Or are there too many variables?

Also, how long after the balance is paid would it reflect on your credit score? IOW does it take place instantly or is ther a grace period or something?

Just a FYI. The last time my credit was run was when my wife and I bought a new vehicle 1.5 yrs ago. mIne was 784. Since then we also bought some furniture that was ~$2500 or so. Furniture is paid off. So with that little bit of info, would you think my credit score would be roughly the same now (before I pay off the 3200)?

The reason for this question is I have a balance of ~3200 on an atv I bought (before the house if that matters). I hopefully will be selling it soon and getting something else. So I was curious how long I should wait when my final payment reaches them before I should start on the new loan?



Thanks
 

784 is pretty damn good.

I'm going to assume that the ATV loan was a fixed-payment loan and not a revolving line, correct?

If so, then paying it off will have only a slight positive effect on your credit for several reasons.

The largest reason ist that the more to the extreme your score is, the more difficult it is it to move in that direction. If have a 784 score, it's probably because you have a sizable history of making payments on time, not everextending your revolving lines, and opening new accounts somewhat sparingly-- so paying off a $3200 loan is just what your credit score would already indicate you would do.

Secondly, the balances of closed-end loans are treated differently, and factor into your credit score, much less than revolving balances.

Third, I would guess that if you've been making your payments on time in the last year and a half and haven't opened up any significant number of new accounts, your credit score has probably already hit the 800-mark.


On your last question, how long it takes for a payoff to be reflected on your credit report really depends on how often your creditor reports to the bureaus. Some creditors report once a month, every month. Others will report once every other month, or even longer. Even if your creditor reports monthly, it could still take a total of 60+ days to see it show up on your report...
 
thanks mathman.
Yes, the atv is a fixed rate. I guess I'll just go for the new loan as soon as I pay the other one off.
 
If you have anything near 784 who really cares?

The extend to which paying it off will affect your score depends on your credit limit. It's called utilization, and if your limit is $3200 and you have a $3200 balance then you're going to be severely impacted by utilization, sometimes as much as 30 points I'd say. Keep it somewhere around 10% and you'd be fine. It operates as a percentage of your limit, not an absolute amount.

[edit]Sorry, I see that this is an installment account and not a revolving account (credit card). In that sense your score isn't likely to be affected much at all as it's not figured in with your utilization. MathMan said what needed to be said[/edit]
 
Originally posted by: de8212
What kind of impact would paying off a ~$3200 balance be on your credit score? Just looking for a rough number. 10 points, 20, 50, etc. Or are there too many variables?

Also, how long after the balance is paid would it reflect on your credit score? IOW does it take place instantly or is ther a grace period or something?

Just a FYI. The last time my credit was run was when my wife and I bought a new vehicle 1.5 yrs ago. mIne was 784. Since then we also bought some furniture that was ~$2500 or so. Furniture is paid off. So with that little bit of info, would you think my credit score would be roughly the same now (before I pay off the 3200)?

The reason for this question is I have a balance of ~3200 on an atv I bought (before the house if that matters). I hopefully will be selling it soon and getting something else. So I was curious how long I should wait when my final payment reaches them before I should start on the new loan?



Thanks
Click to expand...

As far as the credit score, it all depends on what the overall balance and credit limit is. If your overall balance is $3200 with say a credit limit of $5000 and you paid that down, it might hurt your score for a little bit. But its not necessarilly your score that you would worry about: I've seen companies rate jack for large payments, etc. Its never happened to me personally, but it happens. But your FICO could actually drop for a large payment (higher than average).

Also, was the 784 FICO (From myfico.com or equifax), or "FAKO" (transunion.com, truecredit, experian.com, etc.)

-Matt


EDIT: Sorry, I saw too that this isn't revolving. I should have read the other posts first. The second question still applies.
 
Originally posted by: mjuszczak
Also, was the 784 FICO (From myfico.com or equifax), or "FAKO" (transunion.com, truecredit, experian.com, etc.)
-Matt
Click to expand...

Not sure on that one. Wefinacnced at the dealer because they had the lowest interest rate. It was on their paperwork after they ran our credit but I didn't pay attention to "who" it was from.
Nevertheless I think I'm good enough to get the new loan but I just like to play it safe. So if the payoff would positivley affect my score within a few days afterwards then I wouldn't mind waiting. But if it could be as much as 30 - 60 days I won't bother waiting.
 
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