Pay off all debt all at once?

Anonymous · ‎04-10-2018

I'm currently just under $6,000 in credit card debt which puts me at around 34% utilization. Is it advisable to pay off the entire $6,000 at once? Or should it be spaced out? I eventually want to turn my finances into PIF/monthly, but not sure if I should slowly get there or if I should flood cash onto all my cards at once. Knowing I have the money to pay off all my debt makes it very tempting, but all the credit score simulators I've looked at say otherwise.

thornback · ‎04-10-2018

Pay them off all at once since you have the funds to do so.

The score simulators show a higher score is achieved by paying down the debt over time only because it's factoring in the scoring benefit of account aging. So paying down 2K over 6 months appears to be more beneficial than paying it down today - but that's only because 6 months of aging is being considered.

Your accounts will age 6 months in 6 months regardless of whether or not you pay your debts all at once now. You can pay everything off and still reap the benefits of ontime payments + 6 months of aging, in 6 months.. just use your cards, stay out of debt, and let time take care of the rest.

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Anonymous · ‎04-10-2018

@Anonymous wrote:
I'm currently just under $6,000 in credit card debt which puts me at around 34% utilization. Is it advisable to pay off the entire $6,000 at once? Or should it be spaced out? I eventually want to turn my finances into PIF/monthly, but not sure if I should slowly get there or if I should flood cash onto all my cards at once. Knowing I have the money to pay off all my debt makes it very tempting, but all the credit score simulators I've looked at say otherwise.

Defintiely pay those bad boys off!! The sooner you can begin AZEO the better!!

Anonymous · ‎04-10-2018

Great question! I, too, am just under $6000 and wondered if i should pay all at once also. I want my score to raise so I can apply for a mortgage. I heard that spacing it out can bring score up but I just dont want the balance anymore. Let us know what you wind up doing

Anonymous · ‎04-10-2018

Pay them off.

Use the AZEO method with only allowing one to report a small balance, but pay everything else to zero. This will give you the best benefit. Having all accounts to zero may hurt you a little, but paying over time will just force you to pay interest over that amount of time and your score will be no better than paying now and allowing them to age

Anonymous · ‎04-11-2018

I did it! I paid it all off. This feels fantastic!

jlitnns · ‎04-11-2018

Congratulations! It is a wonderful feeling, keep up the great work!