Credit Cards

[Tomstang]

Hello all, I hope someone knowledgable can help me out here. I will be refinancing in May 08. I have done ALOT to help my current score. I currently have an interest only loan that has heled me pay off some debt. My remaining cards are a Sears card at 3500.00 at 29%, maxed out, a Best Buy card at 27% at 1600.00, and a Visa at 12% at 3000.00, maxed out.

I have 1500.00 to spend on debt now. I want to do the best thing to help my score before May.

Should I payoff the card for 1600.00 and close it out, or should I split the 1500.00 and pay 750.00 to the Sears and Visa card , distancing the amount owed from the max?

What will help my score more? Thanx alot.

[ctrob]

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Tomstang wrote:

Hello all, I hope someone knowledgable can help me out here. I will be refinancing in May 08. I have done ALOT to help my current score. I currently have an interest only loan that has heled me pay off some debt. My remaining cards are a Sears card at 3500.00 at 29%, maxed out, a Best Buy card at 27% at 1600.00, and a Visa at 12% at 3000.00, maxed out.

I have 1500.00 to spend on debt now. I want to do the best thing to help my score before May.

Should I payoff the card for 1600.00 and close it out, or should I split the 1500.00 and pay 750.00 to the Sears and Visa card , distancing the amount owed from the max?

What will help my score more? Thanx alot.

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Welcome

First, if you haven't already, read http://ficoforums.myfico.com/fico/board/message?board.id=ficoscoring&thread.id=2654

tons of good info on the board, read up as much as you can.  

Dont close anything just yet, this could hurt your scores.  Posting some more info re your credit reports would be useful.  What are your Fico scores?  Any baddies listed and from when and how much?  How old are your existing cards?

If your scores & credit report allow it, you will most likely benefit by opening a few additional cards.  This would help in getting your utilization  down to a better level.   Maybe some balance transfers to spread the $ around, but don't max out the new cards.  Just get them as a tool to help your utilization %.  Give us some more info and I'm sure you'll get a lot of advice.  

good luck,

ctRob

[Brammy]

Maxed out card can hurt your score almost as bad as a collection.  Start with the maxed out cards brigning it below 90% if you can get them all down to less than 50% of the limit, that would be better tho the best is between 10-30% of your limit.  The maxed out one if the one that would hurt your score the most

[Tomstang]

ctRob, thanx alot. I have been reading a bit since posting, and like you said there is alot of great info. on here. I did learn today about what you were saying- To open a few more accounts and spread around the owed debt, and keep all balances low.

My thinking has ALWAYS been, the less cards the better. I guess thats how Ive been raised.

Can my score actually raise just by opening new cards?

BTW my current score is 675, I worked hard to get it there over the past 2 years from 548. I have no lates since 5 years ago, and one paid collection that still shows up. Two medical collections too.

Im glad I found a forum with people who want to work as hard as me to get better scores.

[DebtSucks]

Before you do anything, go to daveramsey.com.   Pay your cards off and don't open any accounts. What have we come to in this country thinking you have to take money out on credit.  Who cares what your score is when the only thing you owe on is your mortgage and EVERYTHING else is paid for. Now thats a nice feeling. Start saving for what you buy, set up an emergency fund. You know, interest works both ways. Why not have the bank pay you interest instead of you paying interest. Its sad, but this website sets people up for failure by continuing to wade through a sea of debt. Change your behavior and get free from debt. Go to the daveramsey.com and sign up for "Financial Peace University".  God bless.

[DebtSucks]

Go to daveramsey.com and sign up for "Financial Peace University". Get out of debt as fast as you can. DO NOT open any new accounts.

[Brammy]

No I'm not going to agree with Debt sucks and tell yu to cut up your crds and joins Dave's commune, but I do like his advic about not opening anymore cards.  Don't know why your cards are maxed out but since you are thinking of refiing in May and dont have the means to pay them off, I would suggest paying them down. 

The other poster was correct I was assuming that the credit card issue was your biggest problem but if there are other fctors involved, you would also need to look at those.

[DebtSucks]

I did'nt say cut your CC's up. Put them in a lock box and bury them would do though. After using daveramsey.com, I have no debt except for my home mortgage. I know save up for vehicles and other goods. I now have savings that can pay expenses for 4 months. If you want out from under this debt stronghold you need to apply his getting out of debt principles. My FICO is over 800, but I don't need it. I have cash SAVED in a bank now. To get your home, save $, pay CCs, cars, then save for a down payment of 10-20%. It may take a few years but its worth it. Wouldn't is be nice to not be sucked into the world of everyday consumer credit. Get a budget and save, save, save.

[ctrob]

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DebtSucks wrote:

Before you do anything, go to daveramsey.com.   Pay your cards off and don't open any accounts. What have we come to in this country thinking you have to take money out on credit.  Who cares what your score is when the only thing you owe on is your mortgage and EVERYTHING else is paid for. Now thats a nice feeling. Start saving for what you buy, set up an emergency fund. You know, interest works both ways. Why not have the bank pay you interest instead of you paying interest. Its sad, but this website sets people up for failure by continuing to wade through a sea of debt. Change your behavior and get free from debt. Go to the daveramsey.com and sign up for "Financial Peace University".  God bless.

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The OP "cares what his score is" because he wants to refi.  Nobodys instructing the OP to pay  more interest or go further into debt.  One of the options for getting his scores up is to use CC's as a tool to do that.  He obviously knows he can pay off his cards in full (duhh), but at the moment it doesn't sound like that's a possibility. 

If you think this website sets people up for failure then you have your head up your @$$.  (Ladies, pardon my implied french)

[DebtSucks]

Tomstang can't pay them all off right now. $1500 cash on hand. Put that down on one card and get busy on the rest. The fact is he is paying interest. duh. The end of the tunnel is that you can survive just fine without needing credit or a credit score for that matter. Save, save, save, then buy what you "need" from your saved $. Then continue to save again!