How will this affect my credit score?

[iamwiz82]

In January, I ran my credit score and it came out at about 680 (average of the three). The only down side was that my revolving debt was at 78% (wedding stuff). Since then, It has dropped to 34%, and will be down to 0% by the end of this month (depending on W2s). I'm wondering how this will affect my score.

 

[Colt45]

You're going to credit hell for that buddy.

 

[kyparrish]

you're looking good :thumbsup:

 

[DorkBoy]

Your score will lower (some) with paying your debts down to 0%.

Having some debt is good (shows u can manage your budget), max debt and no debt is bad.

 

[iamwiz82]

Originally posted by: DorkBoy
Your score will lower (some) with paying your debts down to 0%.

Having some debt is good (shows u can manage your budget), max debt and no debt is bad.

Hmm... So I should leave a few hundred on it? I'm hoping to buy a house in the next few months, so all the points I could get would help.

 

[boyRacer]

Originally posted by: iamwiz82

Originally posted by: DorkBoy
Your score will lower (some) with paying your debts down to 0%.

Having some debt is good (shows u can manage your budget), max debt and no debt is bad.

Hmm... So I should leave a few hundred on it? I'm hoping to buy a house in the next few months, so all the points I could get would help.

I don't think the credit companies like Experian are updated instantly as in real time.

 

[iamwiz82]

Originally posted by: bR

Originally posted by: iamwiz82

Originally posted by: DorkBoy
Your score will lower (some) with paying your debts down to 0%.

Having some debt is good (shows u can manage your budget), max debt and no debt is bad.

Hmm... So I should leave a few hundred on it? I'm hoping to buy a house in the next few months, so all the points I could get would help.

I don't think the credit companies like Experian are updated instantly as in real time.

i'm talking a few months, though.

 

[Yossarian]

Originally posted by: DorkBoy
Your score will lower (some) with paying your debts down to 0%.

Having some debt is good (shows u can manage your budget), max debt and no debt is bad.

I think you don't know what you're talking about.

 

[vtecluder]

Originally posted by: iamwiz82

Originally posted by: DorkBoy
Your score will lower (some) with paying your debts down to 0%.

Having some debt is good (shows u can manage your budget), max debt and no debt is bad.

Hmm... So I should leave a few hundred on it? I'm hoping to buy a house in the next few months, so all the points I could get would help.

Yeah but wait for a while after u get rid of most of the debt. I have seen from my personal experience that sometimes it takes upto 3 mnths for the credit score to reflect changes. When I applied for car loan last january I had like 80% debt on the cards since october 2003 but my score was 740 in January 2004 so that means things didn't even get updated in 3 months. I checked my score later in April (I guess) and my score went down to 697 so u see.

 

[DorkBoy]

When it comes to the number of credit cards you should have, fewer is generally better. Having a few clean, active charge accounts will boost your score.

Minimize your outstanding debt. Even if your debt is relatively small and your monthly payments are manageable, try to pay down your existing debt as quickly as possible within your budget limitations.

 

[DorkBoy]

Originally posted by: Yossarian

Originally posted by: DorkBoy
Your score will lower (some) with paying your debts down to 0%.

Having some debt is good (shows u can manage your budget), max debt and no debt is bad.

I think you don't know what you're talking about.

From Experian:

When it comes to the number of credit cards you should have, fewer is generally better. Having a few clean, active charge accounts will boost your score.

Minimize your outstanding debt. Even if your debt is relatively small and your monthly payments are manageable, try to pay down your existing debt as quickly as possible within your budget limitations.

The Big word - active

 

[DaWhim]

Originally posted by: iamwiz82

Originally posted by: DorkBoy
Your score will lower (some) with paying your debts down to 0%.

Having some debt is good (shows u can manage your budget), max debt and no debt is bad.

Hmm... So I should leave a few hundred on it? I'm hoping to buy a house in the next few months, so all the points I could get would help.

buying a house? bad idea, you better have 750+ to qualify for the best rate. don't carry any balances for now. your score can drop alot if you utilized all the available credits

 

[vtecluder]

Originally posted by: Yossarian

Originally posted by: DorkBoy
Your score will lower (some) with paying your debts down to 0%.

Having some debt is good (shows u can manage your budget), max debt and no debt is bad.

I think you don't know what you're talking about.

I don't think score will lower if u don't have ne balance but having a small percentage as revolving balance (@10%) is usually good as it shows that u r take the loan and pay it sensibly. But yeah doesn't mean u just keep the 10% balance and just pay the minimum. You should be using the cards and regularly paying it.

 

[iamwiz82]

Originally posted by: DaWhim

Originally posted by: iamwiz82

Originally posted by: DorkBoy
Your score will lower (some) with paying your debts down to 0%.

Having some debt is good (shows u can manage your budget), max debt and no debt is bad.

Hmm... So I should leave a few hundred on it? I'm hoping to buy a house in the next few months, so all the points I could get would help.

buying a house? bad idea, you better have 750+ to qualify for the best rate. don't carry any balances for now. your score can drop alot if you utilized all the available credits

I'm not going to wait for another year for my credit score to get that high. The amount I stand to gain in property value increases more than outweighs that.

 

[vtecluder]

Originally posted by: DorkBoy

Originally posted by: Yossarian

Originally posted by: DorkBoy
Your score will lower (some) with paying your debts down to 0%.

Having some debt is good (shows u can manage your budget), max debt and no debt is bad.

I think you don't know what you're talking about.

From Experian:

When it comes to the number of credit cards you should have, fewer is generally better. Having a few clean, active charge accounts will boost your score.

Minimize your outstanding debt. Even if your debt is relatively small and your monthly payments are manageable, try to pay down your existing debt as quickly as possible within your budget limitations.

Yeah I read it somewhere that u should have like 1 or 2 cards. 15k limit on 1 card is alot better than 5k limit on 3 cards

 

[Vic]

Originally posted by: DorkBoy
Your score will lower (some) with paying your debts down to 0%.

Having some debt is good (shows u can manage your budget), max debt and no debt is bad.

Bullsh!t. Completely wrong. Revolving debt stays on your credit report as active for as long as the account is open, even if the balance is zero. Having zero balances on revolving debt is best for your score, as it lowers the overall balance-to-limit ratio. To get the best score, the OP should pay down as much as his revolving debt as possible, hopefully down to $0, while leaving the accounts open.

Having only 1 or 2 open accounts is NOT good. Most lenders require 3-5 open tradelines (all tradelines, including mortgages, auto loans, credit cards, etc) for approval. "Mini-FICOs" might look good but they don't cut it.

The minimum score needed to qualify for the absolute best mortgage loan programs is 720. Even with a 680, I could still get a first-time homebuyer an excellent mortgage with no down. Advising someone to wait until they get a 750 is just plain stupid.

When pulling all 3 scores, you do not average them. You take the middle score of the 3.

 

[iamwiz82]

Originally posted by: Vic

Originally posted by: DorkBoy
Your score will lower (some) with paying your debts down to 0%.

Having some debt is good (shows u can manage your budget), max debt and no debt is bad.

Bullsh!t. Completely wrong. Revolving debt stays on your credit report as active for as long as the account is open, even if the balance is zero. Having zero balances on revolving debt is best for your score, as it lowers the overall balance-to-limit ratio. To get the best score, the OP should pay down as much as his revolving debt as possible, hopefully down to $0, while leaving the accounts open.

Having only 1 or 2 open accounts is NOT good. Most lenders require 3-5 open tradelines (all tradelines, including mortgages, auto loans, credit cards, etc) for approval. "Mini-FICOs" might look good but they don't cut it.

The minimum score needed to qualify for the absolute best mortgage loan programs is 720. Even with a 680, I could still get a first-time homebuyer an excellent mortgage with no down. Advising someone to wait until they get a 750 is just plain stupid.

When pulling all 3 scores, you do not average them. You take the middle score of the 3.

Well than, it IS 680

The mortgage broker we talked to said a 680 is necessary for an 80/20, but she also offered to look at some grants for us regarding historics houses.

 

[royaldank]

Originally posted by: DaWhim
buying a house? bad idea, you better have 750+ to qualify for the best rate. don't carry any balances for now. your score can drop alot if you utilized all the available credits

I've been in the mortgage industry for a number of years. This simply isn't true. Nowdays, most anything over 700 is good enough for the best products. 680 is usually fine. There's a few that will hit you with points for sub-720 score, but that's rare. If you're ever told otherwise at a mortgage company, you need to seriously consider leaving and finding a new lender.

 

[Vic]

Originally posted by: iamwiz82
Well than, it IS 680

The mortgage broker we talked to said a 680 is necessary for an 80/20, but she also offered to look at some grants for us regarding historics houses.

So you're good to go. That's for a top-of-the-line 80/20 as well, with just a small rate hit on the combo 2nd for the lower credit score.
If they don't care about the rate, a borrower with a good job and a 580 score could get an 80/20.

The 750 comment is garbage though, just like the don't pay your credit cards down to zero comment is garbage too. Absolute top of the line for getting the best mortgage is 720. Once above 720, there is no program better. And scores that high really only count for 2nd mortgages or higher risk programs. If you're refinancing your house rate-and-term at 50% LTV and have a low debt ratio, it doesn't matter if your score is 640 or 840, the rate will be the same. There is a lot more to lending than just credit score (although credit score is really important). OTOH, if in the unlikely event a customer had a 720 score but was 6 months out of a bankruptcy, he's not getting a loan with anyone.