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paying debt

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Anonymous
Not applicable

paying debt

i have 5+ credit cards and all of them the balance is over 80%. Now .. with the cash i have i cant afford to pay all of them under 30% balance. What should i do?

- Pay a small amount on each of them

- Pay only few to bring them under 30% balance

- Pay off 1  or 2 cards?

 Next month i want to buy a house and i would like to improve my CS from 640 to at least 680-700. Thank you!

Message 1 of 7
6 REPLIES 6
Kevin7180
Established Member

Re: paying debt

I think we would need some more info in order to give you a better advice...

 

1) What is your debt and CL on each card

2) How much cash do you have liquid?

3) Annual income

 

Also, What is the price range your looking to purchase?

 

Cheers!

Message 2 of 7
Anonymous
Not applicable

Re: paying debt

capital one 1750 owe 1500

HSBC         2000  owe 1900

firestone     1200  owe  1000

i got 2000 to spare. should i pay on all 3 or just 1

 

Message 3 of 7
JagerBombs89
Established Contributor

Re: paying debt

Message 4 of 7
Anonymous
Not applicable

Re: paying debt

I agree that having the interest rate would be helpful.  However, on first glance - I would suggest paying the firestone off and putting $500 on each of the other ones.

 

That said, I would really recommend paying them all off before trying to buy a house.  You want a 720 midscore for best rates and you also want to have cash available for closing, fixing the house, buying new things, issues that might come up, etc.  Therefore, I would try and pay them all off ($2,000 now, $2,400 more asap) and then have AT LEAST $5,000 more in cash for the house stuff before you start shopping around.  That will also give your scores a chance to rise (pay the CC off in full every time or quit using them until you have the house).  If that takes another year, so be it but at least you'll be more prepared and in a better situation debt wise.  Finally, figure out how much more the mortgage will cost you each month and put that amount into an account (pay yourself with it - use it for the card, the $5k, whatever but save it) and that way you'll be used to paying that amount from your budget when you get the house.

 

Good luck!

Message 5 of 7
Anonymous
Not applicable

Re: paying debt

 Since i am first time buyer i am going with FHA 3% down so i figured 6000 its enough for down payment and closing cost. I am looking in 120.000 range. My credit is pretty clean ( never late payments, no colections) , but just the balance is pretty high.

Message 6 of 7
OptimalCS
Frequent Contributor

Re: paying debt

The truth is that you should pay off all your debt before getting your mortgage. You will end up with a higher interest rate because of your high utilization.

 

If you decided to get the mortgage with your high utilization, you will end up paying 1000 times more with a higher interest mortgage rate.

 

My advice to you is to not play games with your debt. Pay it in full before you make your largest investment.

"Wisdom is the principal thing..."
Message 7 of 7
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