pay off or pay down??????

[Anonymous]

here is my problem.....i am not sure what to do...My wife and I have 6 credit cards that are pretty much max'd out....I am in a position right now to pay them off @ $500 a week to each of the credit cards...I know i am not going to close to accounts, but should i pay them off to a zero balance or pay them down to a balance of $50-$100 on each card and make the monthly payment....which way will boost my score quicker????? THANKS!!!!

[mark925]

Pay them off then whatever you do charge on them after that, pay in full each month except for maybe one.  FICO likes to see activity.

Message Edited by mark925 on 07-09-2009 01:11 AM

[Anonymous]

Pay all off (to cancel out interest charges).  Then in the future, only allow 1 card to report a small balance (like $20-$50), but pay it off by the due date to keep any interest from accruing.

Having 1 account report a small balance will help your FICO overall.  Rotate the use of cards and have a different card report the single balance every couple months so that they all get use and don't get CLD or closed for inactivity.

Be sure that when you have the cards paid off, that you continue to pay the $500 weekly difference into savings and emergency funds.  Make sure you have at least 3 months emergency, but better off having 6 months.  Then put the rest into retirement and savings toward future major purchases (auto, auto maint, vacation, etc.).