My recommendation if you don't need the psychological effect of zeroing accounts (and doesn't appear you do) just hit your highest APR tradeline and throw your money at it... once it's down to a balance you can write a check for monthly, hit the next highest and so on until you're PIFing every balance you have every month rather than paying interest.
No real magic to it but this particular procedure is the more financially astute method of doing it; however, some folks do prefer paying off balances to zero and then attacking the big ones, a little better for interestitial FICO scoring but facts are finances > credit scores, and if you aren't applying for anything one's FICO score doesn't mean much anyway.
There are a few ways you can choose to go about doing this, but I like Revelate's suggestion of tackling the highest APR one first. Now some like to work from the lowest first because they see more visual progress of accounts being zeroed out. But the highest APR one can save you on interest if you don't let it hang around with a balance.
@Anonymous wrote:My fico scores range from 650 - 700. Mainly due to high CC UTI and 4 30+ late payments from 5 years ago. I am trying to figure out the best way to pay off my CCs and I am not sure how to proceed. I have 15 accounts open right now. (9 CC, and 6 store cards) 5 of the 10 cards are PIF. 3 additional cards have a balance low enough that I could do a PIF with the next payment. I am confused on whether or not I should pay them off, or just pay them down to a small balance. I have read that having a small balance is better than a 0 balance because it shows you are using the cards, but I have also read that having too many cards with a balance could be a negative thing. My overall UTI right now is 34%, but I have made enought payments this month to get that down to 29%. (It is going to take me a while to get to < 10% overall UTI. )
How should I proceed?
Thanks
Tim
Best to have more than half of your cards report a zero balance. Once you get to that point, the less accounts reporting a balance the better, except that all accounts at zero balance loses you points.
So, when you get all but one card down to zero, let a small balance report on the remaining card.
(Some people will question whether it really matters if you have 7 of your 15 cards reporting a balance, or 3 of your 15 cards reporting a balance, it's not exactly clear).
@Anonymous wrote:Thanks for the replys. My main objective is to try and raise my score for an auto loan in 3 months. I think I am borderline right now on getting the best rates. How much are the 4 late payments from 6 years ago hurting me?
I don't know how much; I just know that they are.
You might want to hire someone to help you get rid of the negatives.