If I Pay Off My Credit Card (s), How Much Will My Score Go Up?

Mortgage and Lending with Mortgage Consultant, Right Trac Financial Group, Inc. NMLS # 2709 NMLS # 6869

“If I Pay Off My Credit Card(s), How Much Will My Scores Go Up?”


People tell me all the time. “I’ve just paid off my credit card(s) so I’m in good shape!”

     Wrong! This will drop your score. The Algorithms or credit scoring models will give you more points if you keep a small balance on your credit cards! This shows “activity AND increases the history” on your accounts!

What do you do to bring your scores upI got a call from a client that I have been working with for over a year. When we started working together his credit scores were in the mid 500’s. A month ago his mid score was 621.

He called yesterday, saying that he was ready to buy a house and wanted me to update his credit to make sure we were now good to go. When I updated his report, his mid score was a  602. I almost didn’t want to tell him, as he has been working so hard to do all the right things, well not so much.

I could immediately see the problem, he paid all three of his credit cards down to zero, as he was not using them at all. So I called and explained the problem, told him how to correct the issues.

It will take about 60 days to get back to where we needed to be, so that I can handle the preapproval for him.

image: stuart miles/freedigitalphotos.net

Posted by

Subscribe to my blog via Email:


Enter your email address:

Delivered by FeedBurner


Joe Petrowsky, NMLS #6869

Right Trac Financial Group, Inc. NMLS #2709

110 Main St.

Manchester, Ct. 06042

Office: 860 647-7701 x116

Fax: 860 647-8940

Cell: 860 836-9294

Email: joe@righttracfg.com



Like me on facebookfollow me on twitterConnect with me on linkedin

Joe Petrowsky does not guarantee nor is in any way responsible for the accuracy of the information provided herein, and provides said information without warranties of any kind, either expressed or implied.

Equal Housing Statement: We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. We encourage and support an affirmative advertising and marketing program in which there are no barriers to obtaining housing becuase of race, color, religion, sex, handicap, familial status, or national origin.


This entry hasn't been re-blogged:

Re-Blogged By Re-Blogged At
ActiveRain Community
All About Mortgages/Mortgage Networking
Mortgage Solutions
Connecticut Professionals
Consumer Mortgage Tips
credit score
credit report
mortgage preapproval
credit history
credit card debt
account activity

Post a Comment
Spam prevention
Spam prevention
Show All Comments
Praful Thakkar
LAER Realty Partners - Andover, MA
Andover, MA: Andover Luxury Homes For Sale

Joe, yes, contrary to popular belief, not using credit card is not the solution for bringing up the credit score. Nice example. 

Sep 06, 2012 04:03 AM #1
Dan Hopper
Keller Williams Realty Downtown LLC - Denver, CO
Denver Realtor / Author / Advocate/Short Sale

Joe, you are so correct!!  We tell our clients all the time, if you have a windfall of funds and you want to pay off a credit cared, do it over a 6-10 month time frame and keep a very small balance, at all times.  FICO scores are interested in your "payment history"... NOT how quickly you pay off a debt!!

Sep 06, 2012 04:19 AM #2
David Burrows
Classic Realty - Fairfax, VA
No Pressure, Just Seriously Devoted to Real Estate

Joe, this is information that ALL of us need to pay attention to. Thanks for sharing what is real about FICO scores....

Sep 06, 2012 04:52 AM #3
Debbie Reynolds
Platinum Properties - Clarksville, TN
Your Dedicated Clarksville TN Real Estate Agent

Joe, Those credit scores are such a tricky thing. They don't want you to have too much credit or debt but if you are debt free and have closed your accounts they don't like that either.

Sep 06, 2012 05:31 AM #4
Lou Ludwig
Ludwig & Associates - Boca Raton, FL
Designations Earned CRB, CRS, CIPS, GRI, SRES, TRC


Very interesting thanks for sharing the information.

Good luck and success.

Lou Ludwig

Sep 06, 2012 12:07 PM #5
Charles Stallions
Charles Stallions Real Estate Services - Pensacola, FL
800-309-3414 - Pensacola, Pace or Gulf Breeze, Fl.

Hi Joe

So true and oh how we are judged by the score. Folks need to watch there credit score at least once a year IMHO.

Sep 06, 2012 12:39 PM #6
Conrad Allen
Re/Max Professional Associates - Webster, MA
Webster, Ma, Realtor

Hi Joe.  It is counter intuitive to think that owing money is better than not owing money.

Sep 06, 2012 08:10 PM #7
Debbie Gartner
The Flooring Girl - White Plains, NY
The Flooring Girl & Blog Stylist -Dynamo Marketers

Yes, having a credit card and using it wisely (and paying on time) shows that you are credit worthy...and a lot of people don't seem to get this.

Sep 06, 2012 08:42 PM #8
Michael J. Perry
KW Elite - Lancaster, PA
Lancaster, PA Relo Specialist

Joe great tips /advice !!! Keep it coming !!!!!!!!!!!!!!!!!!!!!

Sep 07, 2012 02:04 AM #9
Post a Comment
Spam prevention
Show All Comments

What's the reason you're reporting this blog entry?

Are you sure you want to report this blog entry as spam?


Joe Petrowsky

Your Mortgage Consultant for Life
What mortgage questions can I answer for you
Spam prevention

Additional Information