07-28-2007 03:08 PM
07-29-2007 11:59 AM
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.
07-29-2007 04:51 PM
07-30-2007 11:42 AM
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.)
07-30-2007 12:10 PM
07-30-2007 04:55 PM
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