NEED ADVICE ON PAYING DOWN CREDIT CARDS- make big payments or lots of small ones??

[Anonymous]

We just recently got a home equity loan to pay off/down some credit cards. We didn't take enough to pay the cards completely off, but we are going to pay as much as we can. We have several cards. Does it make a difference on your FICO if you make small payments?? Or can you make a big payment to bring FICO up?? My husband thinks that we should make small payments - this will look better - any advice?? Plus, a couple of the cards are closed - I closed them earlier thinking it would help our credit score but after coming here I found this not to be true. Somebody gave me bad advice. Our scores are around 660 and 677 and we are trying to bring them above 700. Message Edited by cchappy on 01-23-2008 12:05 PM

Message Edited by cchappy on 01-23-2008 12:22 PM

[fused]

Welcome to the FICO Forums!  I noticed you seem to be having some trouble posting. It is possible to edit your own post if you have posted an incomplete message. To edit your post, go to the post. To the right you'll see "Options." Click on "Options" and select "Edit Message" from the drop-down menu. If you need any help with anything, let me know.  Thanks for your contribution to the FICO Forums!

---fused

[Anonymous]

Thanks - I accidentally sent it before I wrote it.

[Anonymous]

Hi cchappy. I found for me that paying down large chunks at a time is a quicker way to bring your scores up. For example, I had a TU score of 521 in March, 2007, with about 80% utilization on all my 7 cc's I had at the time.

I went to bank, withdrew savings and paid down over 2 or 3 months time all of them, to about 14% util. By July 2007, my score had jumped to 681.

I don't think it makes any difference if the pay down is quick or slow over time. You just get higher scores quicker if you make big payments all at once. But that's my opinion. Take it with a grain of salt.

[Anonymous]

We are planning on paying them down within a month or so, but my husband seems to think if you make a couple small payments instead of one big payment - it makes a difference - this is just his opinion and I wanted to see what others thought or if there is an expert out there that may have advice on this??? I would prefer to pay big chunks to get it paid quicker.

[Anonymous]

Go for the big chunks, for 3 reasons:

1.  It will lower your util faster, which will increase your score sooner.

2.  It will cost you less in the long run.

3.  You will pay off the debt sooner.

[Anonymous]

That is what I think - but now I just have to convince my husband that this is better. Anybody else have an opinion on this??

Message Edited by cchappy on 01-23-2008 12:34 PM

[Anonymous]

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cchappy wrote:
That is what I think - but now I just have to convince my husband that this is better. Anybody else have an opinion on this??

Message Edited by cchappy on 01-23-2008 12:34 PM

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Just tell 'em Mas said so, LOL.

On second thought -- are you talking about paying them off in one month, either in smaller chunks or one fell swoop?  Or does he want to spread it out over a longer period of time?

[Anonymous]

We need to pay as much as we can soon - we will probably be paying of 50 - 75% of what we owe on all of them. We have a line of credit that is variable rate so we want to get our score over 700 to refinance that into a fixed rate. He thinks if we make smaller payments (pay $2000 now and pay $2000 in a couple of weeks vs. making one lump payment of $4000) it looks better, but I don't think it makes a difference. What do you suggest - our main thing is to pay the cards down and raise our score. And, what about the cards that are closed that still have a balance - Should we pay less on those since the positive won't show up on those??

[Anonymous]

Your util matters only on the date that your credit score is pulled.  And your score is determined by what was on your reports on that day.  There is no historical utilization (although payment history has a very long memory). 

So you are correct, it won't matter whether you paid the balances down in dribs and drabs or on the day before the report updated.

We'd need to know the balances and CLs of all your open and closed accounts to suggest optimal payment distribution.