Posted on: 22nd Jan, 2011 01:43 pm
I'm in the process of paying off all of my credit cards to help my credit score. I have 5 credit cards with less than $500.00 available credit after they are paid off. I've had these cards for about 3 years. My question is, is it better for me to leave these cards open & not charge anythig on them or charge $20.00 in gas a month & pay them off each month? Which one will help my credit grow faster?
Hi gjcluttrell,
You should leave the cards open though you pay them off. This will help you improving your credit score and will also help you in improving your credit history.
Thanks
You should leave the cards open though you pay them off. This will help you improving your credit score and will also help you in improving your credit history.
Thanks
Pay down your cards where each has a percentage of utilized credit that is less than 30%.
Once this is done you will need to "rapid rescore" those balances so that the bureaus have the new data on your report.
If you just leave it up to the creditors to report the balances to the bureaus it can take up to 90 days.
Contact me if you need more info on rapid rescore through my profile.
Once this is done you will need to "rapid rescore" those balances so that the bureaus have the new data on your report.
If you just leave it up to the creditors to report the balances to the bureaus it can take up to 90 days.
Contact me if you need more info on rapid rescore through my profile.
Retaining the cards and using them periodically is beneficial. You need not use them on a monthly basis, however; you can do it every other month, every third, etc. Having no balance, or very low balance in relation to the limits is always favorable. There's no need to run a balance at all.
I don't know if you really need FIVE credit cards but you want to keep at least some of those cards. Credit cards seem to factor into your score more than anything else since it is unsecured debt.
True that 5 may be overstepping, but if they're all either zero or negligible balance, they can't do much harm in building a score.
Hi gjclutrell!
I agree with the utilization figures mentioned in the previous posts. Here are three steps to pay those cards off efficiently:
1. Take all of your cards and order them from highest interest rate to lowest.
2. Allocate enough money to pay the minimum payments on all cards.
3. Any leftover funds you can allocate should be placed solely on the highest rate card to overpay and pay it off fast. Once it's paid off, move all of those leftover funds to pay off the second highest, then the third, etc.
My next question though is this. You mentioned that "after" you pay off all of those cards your total available credit will only be $500? Definitely keep those accounts open as they are aged and will help, but I would look at maybe finding another line that's a bit larger to have on file to increase your range of utilization (just in case something comes up). I've faced some similar issues with that so check my blog if youw ant to hear my whole story and have the time. Otherwise, good luck in paying those cards off! Remember, keep them paid. Credit and credit cards aren't bad, our personal habits are. :)
I agree with the utilization figures mentioned in the previous posts. Here are three steps to pay those cards off efficiently:
1. Take all of your cards and order them from highest interest rate to lowest.
2. Allocate enough money to pay the minimum payments on all cards.
3. Any leftover funds you can allocate should be placed solely on the highest rate card to overpay and pay it off fast. Once it's paid off, move all of those leftover funds to pay off the second highest, then the third, etc.
My next question though is this. You mentioned that "after" you pay off all of those cards your total available credit will only be $500? Definitely keep those accounts open as they are aged and will help, but I would look at maybe finding another line that's a bit larger to have on file to increase your range of utilization (just in case something comes up). I've faced some similar issues with that so check my blog if youw ant to hear my whole story and have the time. Otherwise, good luck in paying those cards off! Remember, keep them paid. Credit and credit cards aren't bad, our personal habits are. :)