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Answers (4)
- William Biros, "Prudential Biros RE"
- Contributions:42
Talk with a reputable mortgage professional. Usually, the highest interest rate is the way to go (in terms of paying off), but it all depends on the terms of the note.
- Pasadenan
- Contributions:21413
Debts is right! The faster you pay off the high interest credit, the more cash flow you will have to pay off the other debt. The goal is to be debt free and not spend what is not coming in.
That said, never be "late" on any bill, and always pay at least the minimum. Paying more than minimum, and paying early also benifit your score. So, round them up, and skip that coffee (or whatever).
The only point of a credit score is to let potential lenders and business know whether you will pay your bills or not, so pay them, and make sure your payment pattern records that you will always pay.
Don't ask them to raise your limits. They also look at your total available credit compared to your income and the number of credit accounts you have open. They know some people will suddenly max them all out and dissappear.
That said, never be "late" on any bill, and always pay at least the minimum. Paying more than minimum, and paying early also benifit your score. So, round them up, and skip that coffee (or whatever).
The only point of a credit score is to let potential lenders and business know whether you will pay your bills or not, so pay them, and make sure your payment pattern records that you will always pay.
Don't ask them to raise your limits. They also look at your total available credit compared to your income and the number of credit accounts you have open. They know some people will suddenly max them all out and dissappear.
- Terri Linnell, "DebtsNMesses"
- Contributions:6728
Pay off the highest interest rate first.
- sunnyview
- Contributions:25115
The name of that credit game is debt to credit limit ratio. For the best credit score, you must have a limit that is a certain percentage higher than you current debt on the card. You can ask for the limits to be raised in some cases to help. As long as you don't have too much outstanding available credit your score may increase. You can read more about tips on spreading debt and improving your score here. The lenders would tell you for sure what the percentage that they look for is, but I thought that it was no more than 40% of your credit limit on each card in a balance. I am not sure about that %, but you could ask them directly on the mortgage forum. On a related point, this article from bankrate.com here on figuring out your overall debt to income ratio. That article has a calculator so you can run numbers to see what will make the most difference in your overall DTI picture. Hope the links help.
Is it better to pay off one high balance credit card or pay down a little on several others?
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