does how much money you owe on a credit card make a diffrence on your credit score?

Question

will they same effect apply if lets say you owe $2000 on a card and pay 1$700 of it...that shoots your score up...will they same effect apply if u owe $100 on a card and pay 75$??

ok..i should add limit exmaples by sayin if the $2000 balance is off a 5000 limit and the 100 is of $1500...sorry

Answer 1

Yes, how much money you owe on a credit card can make a difference on your credit score. 30% of your credit score is based on credit utilization: 1) On each individual credit card account, What percentage of your credit limit is in use as your current balance? (2) FICO also scores you on the sum of all your balances as a percentage of the sum of all your credit limits.

If any individual account balance is more than 30% of its credit limit, you will hurt your FICO score. Same percentage for all your revolving accounts taken together: the sum of their balances must not exceed 30% the sum of their credit limits.

In your example: your scoring for sum-of-balances versus sum-of-credit-limits doesn't change based on which account you pay down (but don't pay more than the entire balance on any account). But the scoring for individual accounts does change.

First, the $2,000 balance, and paying it down by $1,700. What's missing is the credit limit. If the credit limit is $6.666.67 or more, then your score won't be hurt by a $2,000 balance. 2,000 is 30% of 6,666.67. If your credit limit is lower than $6,666.67, you will improve your credit score by paying down this account until the balance is less than 30% of the limit. If you pay this $2,000 balance down by $1,700, your new balance will be $300. This balance is safe from FICO score penalty if it is less than 30% of your credit limit, that is, your credit limit is at least $300/0.3 = $1,000.

Second, the $100 balance. Again, we need to know the credit limit. If the credit limit is $333.34 or more, then your score won't be hurt by a $100 balance. 100 is 30% of 333.34. If your credit limit is lower than $333.34, you will improve your credit score by paying down this account until the balance is less than 30% of the limit. If you pay this $100 balance down by $75, your new balance will be $25. This new balance is safe from FICO score penalty if it is less than 30% of your credit limit, that is, your credit limit is at least $25/0.3 = $83.33.


Now, the sums: balance sum is $2,000 + $100 = $2,100. Credit limit sum is unknown. Payment sum is $1,700 + $75 = $1,775. Again, we need to know the credit limits so that we can sum them. If the sum of the credit limits is $7,000 or more, then your score won't be hurt by a $2,100 balance sum. 2,100 is 30% of 7,000. If your credit limit sum is lower than $7000, you will improve your credit score by paying down these accounts until their balance sum is less than 30% of their credit limit sum. If you pay this $2,100 balance sum down by $1,775, your new balance sum will be $325. This new balance sum is safe from FICO score penalty if it is less than 30% of your credit limit sum, that is, your credit limit sum is at least $325/0.3 = $1083.34.

Warning: Do not close off accounts when you pay them down to zero. Closing an account can never improve your FICO score. Closing an account can only hurt your score. Make a small, NECESSARY purchase on such a zero-balance account every few months, and pay it off in full when the bill arrives. This will keep the account healthy, active and open. And its credit limit will continue to contribute to your sum-of-credit-limits. Fact: You do NOT have to carry a balance and pay Finance Charges to get the best possible FICO score. Making a small NECESSARY purchase charge every month and paying it off in full every month, on time, gets you max points.

If a zero-balance account is your oldest open account, it counts toward the 15% of your score that concerns oldest open account: the older the better. The average person has an oldest-open-account that has been open 14 years. Only one in four has an oldest account that's been open for at least 20 years.

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Answer 2

Utilization is a major factor in your scores.

If the card you owe $2000 on has a credit limit of $2000, you would be using 100% utilization (major score killer)

You would have better scores if the amount was fully paid or at least paid down to "less" than 20% or 30% utilization.

The same would apply to the $100 card question.

Answer 3

Yes, the amount of your balance on a credit card (or cards) effects your credit score.
Here's an example:
Your limit is $2000. If you are OVER the limit, your score is affected alot. If your balance is over half ($1000), your score is affected somewhat. If your balance is zero, your score actually goes up.
Check out DaveRamsey.com so that you don't get caught in the death grip of credit cards.
Good luck.

Answer 4

Whether or no longer you place the cash again directly to the cardboard, your BF's mom will most likely nonetheless pursue the research. Suicide is a daft concept to don't forget over $500. If you are going to most sensible your self, it is surely no longer valued at doing it for this type of small quantity. The simplest factor to do, for this amount of cash, could be to easily admit it. Come up with a well intent why you stole out of your better half's mother, and easily admit it. If you cannot face doing it face-to-face, do it with somewhat extra drama - go away a written confession and babbling apology in which your better half's mother will uncover it, then disappear to a buddy's condominium for a couple of days. Your better half's mother will name you and inform you the whole thing is all ok. And all will likely be good. Probably.

Answer 5

Yes, it does