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Will zero'ing out all my CC's raise my score?

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What is the name of your state (only U.S. law)? Illinois
I'm trying to apply for SBA veteran loan, and I read that they prefer a 650 min score, well I'm at 630. I carry 2 balances on Discover card, each about $600. if I paid those in full and didnt take on any more charges, would my score raise 20 points or more? thanks
 


quincy

Senior Member
What is the name of your state (only U.S. law)? Illinois
I'm trying to apply for SBA veteran loan, and I read that they prefer a 650 min score, well I'm at 630. I carry 2 balances on Discover card, each about $600. if I paid those in full and didnt take on any more charges, would my score raise 20 points or more? thanks
Paying off credit card balances is not a bad thing to do but this alone won't (necessarily) raise your credit score and it is doubtful in any case that it would raise your credit score by 20 points.

There are many factors that go into determining a credit score. High-score factors, however, include a history showing credit accounts and loans and utility payments have been managed in a responsible manner, the number of credit accounts and loans managed well, the age of the credit accounts managed well, the lack of collection accounts and judgments, rental or home mortgage payment history ... and lenders not only consider your credit score and what is on your credit reports. Lenders will often also look at employment history and sometimes educational history. A lot is considered, in other words, before a lender lends.

Here are links, to the Consumer Financial Protection Bureau and to My Fico's FICO Credit Score Chart:

http://www.consumerfinance.gov/askcfpb/317/what-information-goes-into-my-credit-score.html

http://www.myfico.com/crediteducation/whatsinyourscore.aspx
 
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adjusterjack

Senior Member
What is the name of your state (only U.S. law)? Illinois
I'm trying to apply for SBA veteran loan, and I read that they prefer a 650 min score, well I'm at 630. I carry 2 balances on Discover card, each about $600. if I paid those in full and didnt take on any more charges, would my score raise 20 points or more? thanks
Probably not.

Having small credit card balances and making your payments on time every month are actually positive items, so paying them off isn't likely to change anything.

You're going to have to look for any negative items that could explain the low credit score of 630.

The FICO site that Quincy posted might give you some idea what to look for.

According to this chart 630 is at the low end of "Fair."

Credit Score Chart & Range
760-850 Excellent
700-759 Very Good
660-699 Good
620-659 Fair
580-619 Poor
500-579 Very Poor

http://mortgage1a.com/what-is-a-good-credit-score-range-chart/
 

quincy

Senior Member
The Grinder, I just reviewed your posting history on this forum. You are having problems with debt collectors. I recommend, as I did in one of your previous threads, that you find a financial counselor to assist you before you look into applying for a loan.

Here are links to your earlier threads:

https://forum.freeadvice.com/debt-collections-84/can-i-reverse-threat-made-collector-628049.html

https://forum.freeadvice.com/debt-collections-84/how-file-claim-against-world-law-group-627986.html

Good luck.
 

adjusterjack

Senior Member
Yeah, T G, I looked back on your previous posts, too. You have bigger problems than just $600 worth of current CC debt.

Paying off delinquent and collection account will contribute to raising your score but a lender isn't likely to lend until they are paid off anyway.
 

quincy

Senior Member
The combined Discover card debt of $1200 and your credit score of 630 are not nearly the worry that the other $44,000+/- credit card debt and collections are when trying to get approved for a loan.

The Grinder, if your thought is that you can get a loan to pay off all of your debt, I am thinking that is not going to be a solution likely to work for you right now - you have to be able to show you can and will) pay off the loan - but it is not entirely outside the realm of possibilities. A consolidation loan is something you will want to discuss with the financial/debt counselor that I recommend you see.

Here is a government link on dealing with debt: https://www.usa.gov/debt

Good luck.
 
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FlyingRon

Senior Member
This is not a legal question. You might try over on creditboards.com where they spend a lot of time discussing how to game the fico scores.
 
I know I need either a advisor or attorney. A financial advisor would likely be cheaper, so where would I find one? My situation gets rather complicated and I need a professional to help sort it out.

I use an ex employee for my attorney, what could an attorney do for me? Negotiate down some debt? I can do that on my own. What kind of money we talking for either one? WLG kind of soured me on using outside source.

Thanks to all who replied, I really need some good advice here
 

quincy

Senior Member
I know I need either a advisor or attorney. A financial advisor would likely be cheaper, so where would I find one? My situation gets rather complicated and I need a professional to help sort it out.

I use an ex employee for my attorney, what could an attorney do for me? Negotiate down some debt? I can do that on my own. What kind of money we talking for either one? WLG kind of soured me on using outside source.

Thanks to all who replied, I really need some good advice here
Try the USA.gov site that I provided the link to earlier. It gives you direction on finding finance/debt counselors. Some counselors will offer free or low-cost assistance. Make sure the credit counseling service you use is accredited with either the National Foundation for Credit Counseling or Financial Counseling Association of America.

And, as a final consideration, bankruptcy could be an option. It is an option that should be considered last.

Good luck, The Grinder.
 
Try the USA.gov site that I provided the link to earlier. It gives you direction on finding finance/debt counselors. Some counselors will offer free or low-cost assistance. Make sure the credit counseling service you use is accredited with either the National Foundation for Credit Counseling or Financial Counseling Association of America.

And, as a final consideration, bankruptcy could be an option. It is an option that should be considered last.

Good luck, The Grinder.
What I'm trying to balance in my head is, do I negotiate the CC debt down, pay them off in full, then I'm basically flat broke with a business that needs cash reserves due to a slow season, but my credit would start rising, but with hardly any savings, I'd be 2 bad months from being almost homeless and losing my biz of 33 yrs OR

Do I stand put with owing all this CC debt while maintaining some reserves, hedging they wont sue me, and try and tough it out another 4 yrs then it get wiped off my credit record?

A dilemma for sure, one that keeps my insomnia going...
 
And one more item, I realize I'm accountable for all this, recession had a lot to do with this, but this is on me. I want to do the right thing. But I'll be damned if I'm gonna live in the streets and let my kids go hungry so I can pay back Citibank and all the fat cats that are making millions off loans. OK rant over :)
 

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