I want to pay down my credit cards so that I can improve my credit score and get a mortgage. Does anyone know how long it takes for my credit score to reflect the fact that I paid off a bunch of credit cards? Thanks for any info.
Nobody knows for sure about the FICO score changes. Even the human beings at Fair, Isaac cannot personally work it out, because it is so complex that they need computers to do it.
However, I would expect a paydown like that to take up to sixty days before the new balances showed on a regular credit report. Because it takes awhile for your creditors to send in the updates, and a bit of time for the bureaus to load them into the databases.
Paying down your credit cards will not affect your credit score, not unless you are totally maxed out. In fact, paying off a card can lower your score. What you need to do to improve your credit score is to pay your bills on time, every time, and wait the 7 to
10 years for the bad stuff to drop off. If you behave, you may qualify for a high risk loan in as little as 2 years. Or in 5 years, you may be bankable again. It all depends on the magic formulas at Faire Issac. So, behave, and watch that score start to climb.-john-
2 to 3 months would be the expected time needed for the new lower balances to improve your score.
Managing you credit cards to maximize you score can be done. Paying all debt and bills as agreed is the place to start.
The sweet spot for credit cards, for highest credit score, is approximately an usage of 30% of the approved limit and of course paying each statement on or before the due date. Paying the balance lower than
30% will not improve the credit score. The second part of credit score from credit cards is how long the credit card account has been open. The longer is has been opened, with good payment history, the higher the score can be.If you plan on paying off and closing any of your credit cards, close the newest ones first. Keeping the oldest accounts open, will help your credit score the most.
Paying off and closing all of your credit cards will not improve your score and may in fact lower your score!
Even though you did not ask, I suggest that you go to a mortgage lender you plan on using and ask to be pre-qualified. This will enable you to see how much you can borrow and will enlighten you as to what they take into consideration when evaluating credit.
BeanSmart website is not affiliated with any of the manufacturers or service providers discussed here. All logos and trade names are the property of their respective owners.