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I have this post in the mortgage loans section but it was suggested I move it here. Here is the post:
I have a Sears credit card with a $986 balance but if I don't pay it off by November 30th I will be charged about $200 interest because last year on Black Friday I purchased a washer and dryer that I needed and took the 1 year, no interest no payments. I am wondering if it will hurt my credit score if the $200 interest will be added to the balance. It is possible I could borrow the money to pay it off but I don't know if that is a bad thing to do because won't that look bad as well to the lender because I will have to pay it back to the person I borrowed it from.
I am not putting anything on my credit cards and now have a total balance of $3,900 of credit card debt that includes the Sears credit card. I just don't want my credit score to go down because I apply for a loan in the next couple of months. I have worked hard to get my credit scores up to the low to mid 700's and I had a bankrupcy in 2003.
Thank you for all your replies.
Ok I will spell it all out. I have 5 credit cards which includeds Sears which as I stated has a credit line of $1,850 and now has a balance of $980 but in a couple of weeks the balance will be around $1,180. On the second credit card I have a $4,000 credit line with a balance of $931, the third card has a credit line of $1,800 with a balance of $560, the forth card has a credit limit of $5,000 with a balance of $777 and the last card has a credit limit of $3,050 with a balance of $700.
That is a total of $15,700 total credit line (I have other credit lines from Dept stores with no balance on them) but currently I owe $3,948 and in a couple of weeks it will go up to $4,148 when I get the interest charge to me on my Sears card.
After seeing the whole picture do I have anything to worry about as far as my score going down?
Thank you for all your help!
@weathergirl77 wrote:
Oh one other thing- in my FICO report it states I have 21% for utilization. Is that bad?
21% UTIL is not bad. It could be better, but it is not awful.
As for letting one account go to 60%+ UTIL - you will be OK. Just focus your efforts on getting the balance on that account < 50% ASAP. You don't want your other issuers seeing that and taking AA.
I figured out what I am going to do. I am able to work some OT so I am going to pay the full interest and a little more so it will be at 50% where it actually is now. Do you think this will help?
Thank you for all your help!
@creditwherecreditisdue wrote:
@weathergirl77 wrote:
Oh one other thing- in my FICO report it states I have 21% for utilization. Is that bad?21% UTIL is not bad. It could be better, but it is not awful.
As for letting one account go to 60%+ UTIL - you will be OK. Just focus your efforts on getting the balance on that account < 50% ASAP. You don't want your other issuers seeing that and taking AA.
Anything over 9% utilization is bad. It's an indication trouble may looming and the cardholder overspent.
weathergirl, everything folks have told you here is correct. That said, if you've planned on how to pay off the additional interest coming due such that your balance/utilization on that card will stay where it currently is and no worse, then this should keep your scores relatively close to where they are now. If there's a lag between when your additional interest posts and when you pay it (and ultimately when that stuff shows up on your CR), it's possible that your scores would drop some but they should rebound when your CR updates with the payment.
I still think for the purpose of your USDA app, you should be ok. I would actually suggest, though, that you keep your LO informed of what has transpired and what your plan is. They can provide you with good advice, too.
Sorry if I hijacked the CC board and reverted this thread back to mortgages momentarily...