@Anonymous wrote:
Hello, I took out two credit cards during undergrad and was very irresponsible about making payments. However, now I have the money to pay them off if I'd like but I wonder if it would be better for my credit score to simply make 2x minimum amount payments for a while? Or should I simply just pay them off? These cards have already tanked my credit score. It's now down to about 595. Also, can the re-age thing be used in this situation to bring them current and possibly have recent late payment credit entries removed? Any help would be greatly appreciated...
welcome to the Forums. I really don't understand your questions. we need a bit more information from you:
what are the credit limits and balances for these cards? are they maxed out? have you been making payments? are you in collections? What are the interest rates? Do you have any annual or administrative fees on them?
as to re-aging, it doesn't have anything to do with helping you or bringing you current. re-aging has to do with how the CCCs note your account and when the accounts will come off your report (depending upon what state you are in). without more information from you it is difficult to know if re-aging would even apply to your situation.
in order to get late payments removed from your report you can dispute them(if they are inaccurate) or you can write or call to ask for a goodwill adjustment to your credit report (your accounts need to be in good standing before you can do this).
if you want more information please look at the credit 101 and FAQ threads.
good luck.
Message Edited by dizzier on 04-03-2008 08:02 AM
@Anonymous wrote:Thanks for your quick reply!!!I have about a $1600 balance on a Chase Visa (29.7% effective APR) and a $2100 balance on a Wells Fargo Visa (36.99% effective APR). Yea, I know, the interest rates are horrible, and I can't get them to work with me on them.I could pay them off right now with a student loan disbursement I just received (effectively would be refinancing them at about an 8% rate). I tried to get a 0% APR balance transfer card, but my credit wasn't good enough for any of the good ones.As to the re-aging thing, I had read this article:
re. the re-aging... now i see what you are talking about. usually when we say re-aging around here it is a bad thing. collection agency will accept your payment and re-age the account so that you have to wait 7 years for the baddies to drop which means the negative information will hurt you for longer. but i see what you were talking about now.
what the article is talking about is more like the Goodwill adjustment to your reporting that I talked about in my first reply. That certainly is an option, but you have to make sure that your record was been clear and is in good standing. You have to remember though that the CCC would be doing you a favor to wipe out your baddies. they don't have to. If you take a look at some of the Goodwill Letters in the FAQ thread you'll see what it takes to convincingly ask for a GW adjustment.
Now if you can afford to pay off the debt with your student loan money and still be able to eat then I say go for it since your APRs are so high (suzy orman would not approve of thin but...). And don't close the accounts (so long as you don't have any fees) just stop using them until you can get the aprs down.
Message Edited by dizzier on 04-03-2008 08:30 AM
I think i should probably explain the Suze Orman comment.
Basically, you would be moving your debt from a CC, which if something were to happen to you could be included in a bankruptcy claim, to a student loan which can never go away even if you claim bankruptcy. Suze thinks this is bad and advocates that you pay down your debt on your own without doing that. HOWEVER, with 30% interest rates and no other way to pay this off I think she will understand if you pay off your CCs with your student loan money.
Basically, you would be moving your debt from a CC, which if something were to happen to you could be included in a bankruptcy claim, to a student loan which can never go away even if you claim bankruptcy. Suze thinks this is bad and advocates that you pay down your debt on your own without doing that. HOWEVER, with 30% interest rates and no other way to pay this off I think she will understand if you pay off your CCs with your student loan money.
If it's simply a matter of moving from an account that could be negated by bankruptcy to one that couldn't, I'm ok with that.
Even if it were a financially prudent option, on principle, I want pay off all my debts. I don't reserve any judgment for those that do use the option, it's just a personal choice of mine not to.
I'll definitely take a look at some of the goodwill letters.
As far as rebuilding the score - once the accounts are paid off, should I just make small purchases on the cards and make sure to pay them off each time before any interest accrues? Or perhaps get a different card with a lower rate and use that one in the same manner?
Thanks again for your time and attention in replying to my post! If you ever have any questions answerable by a medical student with two engineering degrees, let me know and I'll be happy to oblige 
@Anonymous wrote:If it's simply a matter of moving from an account that could be negated by bankruptcy to one that couldn't, I'm ok with that.Even if it were a financially prudent option, on principle, I want pay off all my debts. I don't reserve any judgment for those that do use the option, it's just a personal choice of mine not to.I'll definitely take a look at some of the goodwill letters.As far as rebuilding the score - once the accounts are paid off, should I just make small purchases on the cards and make sure to pay them off each time before any interest accrues? Or perhaps get a different card with a lower rate and use that one in the same manner?Thanks again for your time and attention in replying to my post! If you ever have any questions answerable by a medical student with two engineering degrees, let me know and I'll be happy to oblige
definitely check out the GW letters. I'd opt for that before doing what the article suggested (especially if you can pay the cards off).
If you wanted to make small purchases and Pay in full every time (before interest accrues) that would be a good option to take. just be sure to keep your utilization at 1-9%. but if you wanted to "sockdrawer" the card and only use it every few months that would work too. if you read through the forum you'll see that members have had good luck with both options.
a compromise position, and something i do myself is cycle my cards. I have 3 CCs but i only use one at any given time (and i have one at 0% for a BT). I keep the utl low (less than 6%) and every few months I switch it out for another card.
if you can find another card you want then of course you could apply for it, but if i were you i'd try to clean up my credit a bit more before i started applying for new cards. With your current scores you will have a hard time getting good credit cards without annual fees.