topic Re: Best Way to Pay in Rebuilding Your Credit

Best Way to Pay

Anonymous — Mon, 30 Jun 2014 21:05:36 GMT

Hi Everyone!

Im new here, Ive read some of the posts and decided to join to get help paying off my debt.

Right now I have 9 credit cards, 1 is payed off the rest are a mess. My credit score is in the 500's and I want to get it up so I can put an offer down on a house in December. So heres my big guestion

guestion- what is the best way to make payments that will increase my score. My friend told me just pay $20 more than the minimum payment each month and it will increase. My dad said pay the minimum payment and then $5 a week extra. My coworker said make the minimum payment 2 times a month and $10 each week.... so what is it? How can I get my score up?

Re: Best Way to Pay

Whitneyy — Mon, 30 Jun 2014 21:11:00 GMT

I would actually just try to pay them all off the best way I could.

Each month, all but one of your cards should report a 0 balance, and the one that doesn't should report between 1-9% of the limit for best scoring.

Good luck.

Re: Best Way to Pay

gdale6 — Mon, 30 Jun 2014 21:14:13 GMT

@Anonymous wrote:
Hi Everyone!
Im new here, Ive read some of the posts and decided to join to get help paying off my debt.
Right now I have 9 credit cards, 1 is payed off the rest are a mess. My credit score is in the 500's and I want to get it up so I can put an offer down on a house in December. So heres my big guestion
guestion- what is the best way to make payments that will increase my score. My friend told me just pay $20 more than the minimum payment each month and it will increase. My dad said pay the minimum payment and then $5 a week extra. My coworker said make the minimum payment 2 times a month and $10 each week.... so what is it? How can I get my score up?

Ultimately to get your best Fico from your revolvers you want one of them to report each month 1-9% of its CL to the CRAs the rest at 0. Since you are carrying balances on 8 you are getting hammered for that and if they are near the limit you are getting clocked for that one too. What I would do here is immediately pay down all 8 to below 90% of each cards individual CL this will take them out of the maxed out category and raise Fico, then what you do is payoff the highest interest rate card first and make minimums on the others and continue this till you are out of debt. Good luck and welcome to the board

Re: Best Way to Pay

Anonymous — Mon, 30 Jun 2014 21:41:42 GMT

Thank You Both!

So these are my cards

Wells Fargo 800CL owe 785

Capital One Journey 750CL owe 713

Discover It 500CL owe 480

Care Credit 1000CL owe 818

Amazon 700CL owe 621

Walamart 700CL owe 620

Tire Kingdom 900CL owe 800

Lane Bryant 150CL owe 125

Marks and Morganne 300CL owe 0

So my best bet is to get all of them down to 100 or less?

Re: Best Way to Pay

Whitneyy — Mon, 30 Jun 2014 21:44:49 GMT

@Anonymous wrote:
Thank You Both!
So these are my cards
Wells Fargo 800CL owe 785
Capital One Journey 750CL owe 713
Discover It 500CL owe 480
Care Credit 1000CL owe 818
Amazon 700CL owe 621
Walamart 700CL owe 620
Tire Kingdom 900CL owe 800
Lane Bryant 150CL owe 125
Marks and Morganne 300CL owe 0

So my best bet is to get all of them down to 100 or less?

Yes because they are all maxed out.

Re: Best Way to Pay

gdale6 — Mon, 30 Jun 2014 21:50:24 GMT

@Anonymous wrote:
Thank You Both!
So these are my cards
Wells Fargo 800CL owe 785 Pay this one below 720 its maxed out
Capital One Journey 750CL owe 713 Pay this one below 675 its maxed out
Discover It 500CL owe 480 Pay this one below 450 its maxed out
Care Credit 1000CL owe 818 Not maxed
Amazon 700CL owe 621 Not maxed
Walamart 700CL owe 620 Not maxed
Tire Kingdom 900CL owe 800 Not maxed
Lane Bryant 150CL owe 125 Not maxed
Marks and Morganne 300CL owe 0

So my best bet is to get all of them down to 100 or less?

Once you have paid down the 3 that are maxed to below the amounts I have stated all your cards will be out of the maxed out FICO category, then what you want to do is pay off the one that has the highest interest rate first and on down the line until you have a balance on 1 card of 1-9% its individual CL. The less cards that report a balance the higher your FICO goes. If you have 1 dollar on all 8 of those cards you would still take a significant hit to FICO just because of the number reporting a balance over the total number of revolving open accounts that you have....

Re: Best Way to Pay

Carrie_in_Pa — Mon, 30 Jun 2014 22:14:50 GMT

I would sort them by lowest balance to highest balance. Pay off the lowest ones as fast as you can and it won't seem so overwhelming as you have less to deal with.

For the other cards i would double the minimum each month if you can.

Knock out all the little guys and there won't be so many.

Re: Best Way to Pay

revivemycredit — Mon, 30 Jun 2014 22:27:35 GMT

@Carrie_in_Pa wrote:
I would sort them by lowest balance to highest balance. Pay off the lowest ones as fast as you can and it won't seem so overwhelming as you have less to deal with.
For the other cards i would double the minimum each month if you can.

Knock out all the little guys and there won't be so many.

or you can start paying off the ones with the highest interest rates first. or you can try to pay down as many tradelines as you can to <20%. you're currently at 86% utilization, which is fairly high. good luck

Re: Best Way to Pay

Anonymous — Tue, 01 Jul 2014 02:40:39 GMT

Another question that I just realized, can I pay them off, close them, and still have a good credit score or should I pay them off and leave them open? Because I want/need to have a good score to put an offer on a house in December/January.

Re: Best Way to Pay

Carrie_in_Pa — Tue, 01 Jul 2014 02:43:18 GMT

I wouldn't go closing them off just yet. Not until after you have balances paid down on most of them, if not all of them. You don't want to axe a bunch of cards that could end up being the ones you should keep.

Re: Best Way to Pay

kjel — Tue, 01 Jul 2014 02:49:14 GMT

@Anonymous wrote:
Another question that I just realized, can I pay them off, close them, and still have a good credit score or should I pay them off and leave them open? Because I want/need to have a good score to put an offer on a house in December/January.

Do not close the accounts.

Pay them off in order from smallest to largest. And with your largest credit limit card (Visa/Master/etc) keep the balance under 10% of all your combined credit limits.