Credit Points?

Question

I am in the process of cleaning up my credit so I can purchase my first home. I paid off 2 outstanding balances. how many points will my score go up. how much points do you earn for each paid off balances. one balance was for $250.00 the other was $690.00 The one for 250 will be deleted completed. any ideas?

Answer 1

No one knows exactly how the points are figured and even the 3 credit reporting agencies will have different scores for the same information.

Here is how the score is calculated in basics.

* Payment history – 35%
* Amounts owed – 30%
* Length of credit history – 15%
* New credit – 10%
* Types of credit used – 10%

If you have a history of late payments, the largest percentage, it will take some time for that portion of the total score to go up. You need to have a history of on time payments.

Since you've just paid off two debts, your overall debt has gone down. That will also improve your score. However, no one can tell you exactly how many points you'll get.

Answer 2

Credit scores are made up over periods of time.

Simply having debt only effects your credit score if you are way up on your credit limit. Lets say you have 3k of total credit line and 1k in debt, paying that 1k off will not effect your credit score much one way or another. Alot of people make the mistake of thinking they have bad credit just because they have debt, when in reality the people with the top credit scores always have debt. Also, your debt is so low that lenders are not going to think of that as risk.

My advice to you is to a little on your cards, but keep the rest in a "home" savings fund. You will always want a small security net when you buy your first home because there are always going to be fix up jobs, and hidden expenses you may not be aware of.

Answer 3

there are a LOT of factors your credit score is based off of. if you have collections and you pay them off but they do not get removed from your file (deleted) then you hardly accomplished anything besides updating the collection. if you DO pay them off get in writing that they will delete the account from your file before you send them anything.

you want have revolving credit that has history with 0 late payments and balance is 30% of your limit

if you have a lot of derogatory credit you may want to use a credit restoration company to dispute all negative credit.

Answer 4

it may just go up a little, it takes time for your score to go way up..