topic Re: Paying Off Debt in Understanding FICO® Scoring

Paying Off Debt

Anonymous — Tue, 25 Mar 2008 14:44:44 GMT

If I pay off my credit card will my score go up significantly? My credit limit is $600.00. If I pay off a loan that has $399.00 of $1000. borrowed will it help my score or hurt it if I pay it off three months early?

Re: Paying Off Debt

64met — Wed, 26 Mar 2008 08:01:49 GMT

I am by no means an expert but I can speak to personal experience.... I had alot of CC debt that I paid off over the last 12-16 months with anticipation of moving (which we are doing next month). What I have found out as I shopped my new home loan was that I should have NEVER cancelled the cards I paid off... (I did this b4 I found this site) So; the lesson I learned was simply keep some cards BUT with a very small balance VS credit available; I believe this will reflect you can manage debt. The experts on this site can give you much better, specific advice.

Good Luck!

Re: Paying Off Debt

Anonymous — Wed, 26 Mar 2008 12:15:56 GMT

@Anonymous wrote:
If I pay off my credit card will my score go up significantly? My credit limit is $600.00. If I pay off a loan that has $399.00 of $1000. borrowed will it help my score or hurt it if I pay it off three months early?

Paying down your credit cards is the best way to raise your scores. Is your loan an installment loan? Those have less effect on your score. If it's between paying down your card and paying off the loan - I'd pay on the card.

Re: Paying Off Debt

Anonymous — Wed, 26 Mar 2008 13:02:59 GMT

@Anonymous wrote:

@Anonymous wrote:

If I pay off my credit card will my score go up significantly? My credit limit is $600.00. If I pay off a loan that has $399.00 of $1000. borrowed will it help my score or hurt it if I pay it off three months early?

Paying down your credit cards is the best way to raise your scores. Is your loan an installment loan? Those have less effect on your score. If it's between paying down your card and paying off the loan - I'd pay on the card.

Agree with this 100%.

Re: Paying Off Debt

Anonymous — Wed, 26 Mar 2008 13:26:11 GMT

Get that $600 limit raised as high as you can. You want atleast $2500 CL. So call the company and say you want a $5000 CL. They might just give it to but in most cases they will say they cant go thata high but can do$2500. Thats what you wanted in the fist place! Always ask for more than you really want.

Goode Luck