topic Re: To pay off or not to pay off? in Credit Cards

To pay off or not to pay off?

Anonymous — Thu, 04 Sep 2008 01:18:03 GMT

I have 3 cards, WAMU, Chase and CapitalOne. I now have the money to pay off the balance completely, however, I have heard that this actually can lower scores. My current balances are, WAMU-3,700-CL 12,500, Chase-2,200-CL- 10,500, CapitalOne is a no brainer as I neared my CL while on vacation, they raised my int from 9.99% to 30% within one billing cycle, I opted out and am done with them. So, leave a small balance of PIF?

TIA!

Elle

Re: To pay off or not to pay off?

Creditaddict — Thu, 04 Sep 2008 02:08:59 GMT

PIF, you will never loose points when going from having balance to having no balance.

you will see a pretty big jump i would bet.

the fact all your account are reporting balances is hurting you even before you factor in util over 9%

and interest! why would you want to pay interest if you had the option not to

Message Edited by Creditaddict on 09-03-2008 07:08 PM

Re: To pay off or not to pay off?

Anonymous — Thu, 04 Sep 2008 05:22:57 GMT

For max fico points, it's best to let *less* than half your accounts report a balance of less than 10%. Since you have three cards, let one report a very small balance. All zero balances shows that you have credit available - but letting something report demonstrates that you use your credit and are responsible with it.

Personal example - I have five open accounts. I just went from one account reporting a small balance to none and my score dropped about 10 points! Macy's should report in the next couple days so I expect to get those points right back!

Re: To pay off or not to pay off?

Anonymous — Thu, 04 Sep 2008 06:39:07 GMT

You get more points by showing small balances on a couple of cards. I once paid all my cards to 0 balances and my score went down.

Re: To pay off or not to pay off?

Anonymous — Thu, 04 Sep 2008 07:28:02 GMT

PIF

Re: To pay off or not to pay off?

Creditaddict — Thu, 04 Sep 2008 15:00:58 GMT

there is a big difference from letting a balance report on one card for util and best fico scoring and paying interest. poster has been carrying balances so any balance they still leave with incure finance charges. I agree poster should use atleast 1 card a month and rotate and allow less than 9% to show on credit. but for the sake of this posting, PIF and stop paying interest.

Re: To pay off or not to pay off?

TangMeister — Sat, 06 Sep 2008 11:06:46 GMT

@Creditaddict wrote:
there is a big difference from letting a balance report on one card for util and best fico scoring and paying interest. poster has been carrying balances so any balance they still leave with incure finance charges. I agree poster should use atleast 1 card a month and rotate and allow less than 9% to show on credit. but for the sake of this posting, PIF and stop paying interest.

Re: To pay off or not to pay off?

Anonymous — Sat, 06 Sep 2008 12:45:06 GMT

What does it matter if your score drops a tiny bit from not having one account reporting. It makes no sense to me to constantly have to be vigilant about letting one account report, unless you plan to apply for credit and want a maximum score.