Recent Posts

How Much Will Paying Off Credit Cards Improve My Score?

Paying off credit cards can improve credit scores substantially as outstanding debt is the second most heavily-weighted factor in calculating scores. Here we examine factors that determine credit scores. If negative marks on your credit report are the cause of your low score, it is advised to find a credit repair service to help remove them.

A survey conducted by the Consumer Federation of America found that a startling number of Americans know little about credit scores, including more than a quarter of respondents not knowing ways to raise or maintain their scores.

There are many ways to improve credit scores and paying off revolving debts is one of them. Credit cards and other outstanding debts is the second most important factor considered when determining your FICO score – the most widely used credit score by lenders. Therefore by reducing the amount you owe your score will increase, but by how much is determined by other factors.

One quick way to raise your score is to hire a credit repair company that can remove negative marks on your credit reports that lower your score.

There’s Not a Fixed Amount of Points Your Score Will Improve

Because each individual’s credit report is unique and there are many factors that determine one’s score other than credit card debt, there’s no set amount of points your score will improve from doing any one action that applies to everyone.

How Much Your Score Improves Depends on Your Outstanding Balance

Someone who pays off $1,000 on a card with a $5,000 limit isn’t going to see the same score hike that someone paying off a maxed out card will. This is because of your credit to debt ratio. The generalized rule is for every open account you have, you want your credit utilization to be below 30 percent.

Always keep your credit utilization below 30 percent.

Example: If you have a card with a $1,000 limit, you never want to have more than $300 charged on it.

How Long it Takes You to Pay Your Credit Card Debt Also Matters

The manner in which you pay your credit card debt also contributes to the rate at which your score improves.

For instance, if you stop using the card and continue to pay it down month after month until it is eventually at a $0 balance or at least below 30 percent utilization, your score will very gradually increase by a few points here and there, assuming all of your other credit accounts are in good standing. If you pay the balance in full, you’ll notice a moderate point increase much sooner.

The best way to see what actions can improve a score and by how much is to use a credit analyzer tool. A credit analyzer can tell you how to improve your score based on the amount of cash you have on hand to pay your debts, as well as how much of a point increase to expect per action.

Alas, most credit analyzer tools aren’t free, but Credit Karma has a Credit Score Simulator that uses the information on your TransUnion credit report to estimate the result of changes to an account.

The 4 Other Factors That Determine Your FICO Credit Score

By now you know that paying your credit card debt will improve your credit score, but what else makes up your FICO score?

These percentages are used to calculate FICO scores, the credit score used by 90% of lenders.

1. Payment History – 35% Payment history is the largest factor used in determining your FICO score. This includes on-time payments, so if you’re trying to improve your score, whatever you do, don’t let a payment run late or be missed.

2. Length of Credit History – 15% What this means is how long your accounts have been opened. Generally, a longer established credit history results in a better score, assuming the accounts are in good standing. FICO looks at the age of your newest account, oldest account, and the average age of all of your accounts combined.

3. Types of Credit – 10% What types of credit do you have? A mortgage, student loans, credit card debt, medical bills, retail accounts…all of these are considered.

4. New Credit – 10% You never want to open too many new accounts within a short amount of time. According to, “Research shows that opening several credit accounts in a short period of time represents a greater risk – especially for people who don’t have a long credit history.”

The Road to Recovery: How to Boost Your Score

By boosting your score you’ll receive lower interest rates and increase your chances of approval for all types of loans and credit decisions.

Your credit report information is updated frequently, so when you begin making positive changes it won’t take very long to notice improvements if you’re consistent. Other than paying down your credit card debt, there are other actions you can take.

The Consumer Federation of America suggests these four actions for improving your credit score:

  • Consistently pay bills on time every month.

  • Do not max out, or even coming close to maxing out, credit cards or other revolving credit accounts.

  • Pay down debt rather than just moving it around, as well as not opening many new accounts rapidly.

  • Regularly check credit reports to make sure they are error-free.


What tips do you have for increasing your credit score? Are you looking to increase your credit score but hitting roadblocks? Sound off in Comments, on The Shannon McCarthy Team Facebook Page or on our Twitter or Instagram Feeds. And don't forget to subscribe to the monthly Shannon McCarthy Team HOME ADVICE email newsletter for articles like this one delivered straight to your inbox.

Follow Us
Search By Tags


​Shannon McCarthy

Licensed Real Estate Salesperson

Keller Williams
125 High Rock Ave, Suite 200
Saratoga Springs, NY 12866


Home       Saratoga Springs Real Estate       About Shannon McCarthy       Featured Listings       Search The MLS       Sellers       Buyers       Communities       Blog       Contact       Site Map