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Started By
Message
If I want to raise my credit score, what should I do with my debt?
Posted on 7/13/15 at 3:50 pm
Posted on 7/13/15 at 3:50 pm
I don't have the best credit score currently, but I want to fix that. I've got student loans and a couple credit cards on there. Car loan is fully paid off.
As of right now, I can pay off the two credit cards in full (about $3000 total). Is this something I should do, or should I just pay maybe double/triple the monthly payment every month and bring it down over a longer period of time?
Basically, what will help the credit score the most: lesser debt or more ontime payments?
As of right now, I can pay off the two credit cards in full (about $3000 total). Is this something I should do, or should I just pay maybe double/triple the monthly payment every month and bring it down over a longer period of time?
Basically, what will help the credit score the most: lesser debt or more ontime payments?
4
Posted on 7/13/15 at 3:58 pm to Chair
quote:
Basically, what will help the credit score the most: lesser debt or more ontime payments?
If you can pay them off I see no downside to that. Just don't close the accounts.
Posted on 7/13/15 at 3:58 pm to Chair
How you pay off credit cards doesn't matter. Paying them off is all that matters.
Pay them down as quickly as you can, unless it's a 0% introductory rate.
There is no feature on a credit report showing how you paid down credit card debt. The only info is point in time.
Pay them down as quickly as you can, unless it's a 0% introductory rate.
There is no feature on a credit report showing how you paid down credit card debt. The only info is point in time.
Posted on 7/13/15 at 4:04 pm to TheHiddenFlask
quote:
There is no feature on a credit report showing how you paid down credit card debt. The only info is point in time.
So let's say in 6 months, the $3000 is down to $50 (just to keep cards open).
If I pay them all off now or $500 per month for 6 months, my score will be identical after those 6 months?
Posted on 7/13/15 at 4:14 pm to Chair
quote:
down to $50 (just to keep cards open).
You can have open accounts with a $0 balance. Pay them off in full so you aren't paying interest. If you have a 0% rate for a short time (as someone else mentioned), you can ride out the 0%. Otherwise, there is no need to pay interest if you don't have to.
Posted on 7/13/15 at 5:59 pm to Chair
You like paying interest?
Pay the damned credit cards off. If you use them you will always have a balance reporting to the credit bureaus. You want low utilization. A high credit score is the result of multiple factors including but not limited to credit utilization, payment history, number of open accounts, average age of accounts and others.
Pay the damned credit cards off. If you use them you will always have a balance reporting to the credit bureaus. You want low utilization. A high credit score is the result of multiple factors including but not limited to credit utilization, payment history, number of open accounts, average age of accounts and others.
Posted on 7/13/15 at 5:59 pm to Chair
Correct.
You also don't need to keep a balance on them. Pay it to $0.
You also don't need to keep a balance on them. Pay it to $0.
Posted on 7/13/15 at 8:07 pm to Chair
Credit utilization is 30% of your score...pay it off.
Posted on 7/14/15 at 10:19 am to Chair
quote:
quote: There is no feature on a credit report showing how you paid down credit card debt. The only info is point in time. So let's say in 6 months, the $3000 is down to $50 (just to keep cards open). If I pay them all off now or $500 per month for 6 months, my score will be identical after those 6 months?
Assuming you keep balance at zero your credit score will be better as your credit to debt ratio will be better for 6 month period.
My advice is use one cc to get tank of gas, one to eat, and pay them down to zero each month. Shows lenders you can manage your credit, which will raise your credit worthiness
This post was edited on 7/14/15 at 10:20 am
Posted on 7/14/15 at 11:15 am to Chair
A good credit score is the cumulative result of good credit decisions, and should not be a goal, in and of itself.
If you're going to try to min/max for a mortgage or something - I understand that.
If you're going to try to min/max for a mortgage or something - I understand that.
Posted on 7/14/15 at 5:50 pm to Ace Midnight
quote:
A good credit score is the cumulative result of good credit decisions, and should not be a goal, in and of itself.
Well, I'm paying the cards off now just to get back to 0 and go from there and use them more responsibly from now on. Was just wondering if one method would be more efficient than the other in terms of credit rating.
Posted on 7/15/15 at 10:09 am to Chair
the key to credit cards and good credit scores is your balance on a card should never be more than 30% of the limit. so before you pay off your credit cards you should pay all of them under 30% then work on paying them off. You need at least 3 open trade lines(credit that reports every month) to maintain a good credit score. I look at peoples credit all day every day as a mortgage officer.
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