tpmcCalifornia wrote:Question regarding how to pay down credit cards.I'm building a house and the builder ran out of money.Because it is a construction loan, there is significant $$ in equity but I cannot tap into it until the project is completed with an occupancy permit in hand.I have been paying him out of pocket to get the project finished.As such, I charged many credit cards up to the 90% - 95% level.My score dropped from 755 down to 675 = 80 points in 6 months due to this activity over time.I now have some cash and want to pay the cards down. Should I pay off a select few, or pay them all down to a lower loan to available credit ratio? (Ex. In lieu of 90% of available credit, down to 70%). Further, what are the trigger points? I know if you are below 50% of LTV, it is a score adjuster at the 49% mark. What are the other trigger points? 79% or 69%? Hoping this makes sense and would greatly appreciate any input.
The score simulator is highly inaccurate. It's far better to pay down the balances quickly.
IF you believe the FICO score simulator, your score will actually rise about 20-30 points MORE if you pay them down slowly over the course of 6 months, vs. paying them down all at once. At least that's what it does for me (when I run the score simulator, put in what happens if I pay X of my revolving debt. vs what happens if I pay X amount/month for X months.)
MidnightVoice wrote:The reason the score simulator "prefers" paying over 6 months is that it also adds in 6 months ageing and assumes perfect payment during this tim,e.Paying off at once and waiting 6 months will be better