Payoff - Number of Accounts or 1-2 High Balance

[Anonymous]

Sometimes the smart financial move isn't always the best for short-term fico scoring. Luckily for us utility is adjusted monthly and scores rebound immediately.

Pay off the higher APR first. Don't worry about your day to day FICO score if you are not in the middle of a applying for a mortgage or other major credit need.

You took control of the situation and will be in great shape!

[Anonymous]

scorerise, you are so right about the conflict between doing the "right thing" financially and practically and doing things to raise the credit score.  I've learned there are three ways to focus on this:

1) FICO - Paying off a closed, lower interest account to raise the score;

2) Financial - Paying off highest APR first;

3) Practical - Paying off smaller accounts first to eliminate minimum payments to improve cash flow;

Then, as I write this, Suze Orman comes on Good Morning America and says to only pay MINIMUM on credit cards until you SAVE an 8-month emergency fund!  She claims credit is so tight it's actually worth holding off until developing some savings! 

[MattH]

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@Anonymous wrote:

scorerise, you are so right about the conflict between doing the "right thing" financially and practically and doing things to raise the credit score.  I've learned there are three ways to focus on this:

1) FICO - Paying off a closed, lower interest account to raise the score;

2) Financial - Paying off highest APR first;

3) Practical - Paying off smaller accounts first to eliminate minimum payments to improve cash flow;

Then, as I write this, Suze Orman comes on Good Morning America and says to only pay MINIMUM on credit cards until you SAVE an 8-month emergency fund!  She claims credit is so tight it's actually worth holding off until developing some savings! 

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Liz Pulliam Weston disagrees with Suze's advice because it doesn't take into account the risk of credit card companies taking adverse actions such as raising rates and lowering credit limits in response.