My mother recently received some insurance money and has offered to help me pay off my credit cards so I can start saving to buy a home. I have about $8000 in debt and I'd like to start saving immediately. Is it good for my credit score to pay off all my debt at one time, or should I do so gradually?
2006-08-14 16:19:52 · 13 answers · asked by CarolP 2 in Business & Finance ➔ Credit
Wow! This is what I'd suggest doing:
1. Pay your debt down to 30% of your credit limits. This will help to improve your score without completely depleting your nest egg.
2. Continue to make the same payments to your credit cards that you did prior to paying them down. You'll be establishing a payment history and paying them down even more quickly.
As you finally pay off the balances, start banking your budgeted payments.
3. Save the rest for your closing costs. For many programs you'll need to show a 2 month average with a consistent balance. Any sharp increases in your bank account statements may need to be explained. Other programs require 2 months cash reserves.
Please keep in mind that there are programs that offer 100% financing, but you'll still need to have funds to cover closing costs.
I hope this answers your questions. If it hasn't please contact me at amkornele@yahoo.com.
Best of Luck!
Anne : )
2006-08-14 17:28:01 · answer #1 · answered by amkornele 3 · 1⤊ 0⤋
Here is the answer for ya.
What other revenue can you generate with that 8000 bucks?
I mean what is the interest rate that your credit cards are charging?
It short terms they are charging you lets say 800-1000 interest per year on that kind of money. Can you make more than that by investing that 8000 dollars over the short term. I honestly think you can. So think about paying some of it off and investing the other. Cash out around Xmas time and then pay them off.
2006-08-14 16:26:26 · answer #2 · answered by Joe Knows 3 · 0⤊ 0⤋
No!
The way the US credit system works is this.
Companies want to know that you can pay big bills in the long run. They don't care whether or not you can come up with large cash sums and pay it off as soon as you buy an item or whatever. Instead, pay off some of it each month on a consistent regulr basis without ever being late. The interest won't rack up on you, and you will show the evil credit card companies that you can be trusted and that you are a stable individual :)
2006-08-14 16:28:36 · answer #3 · answered by kenny_the_bomb 3 · 0⤊ 1⤋
You should pay off all your credit card debt at once regardless of how it will affect your credit history. By the time you will have saved enough for your home, your credit history will be just fine.
2006-08-14 16:27:41 · answer #4 · answered by mpzones 2 · 0⤊ 0⤋
I would chop those in half at least. It depends on your cash on hand. If she just pays the cards only take it.
2006-08-14 16:30:14 · answer #5 · answered by Anonymous · 0⤊ 0⤋
Not sure read some credit tips and articles on this site
2006-08-14 16:29:40 · answer #6 · answered by Elite female 3 · 0⤊ 1⤋
OMG! I wish i had that kind of money! By all means! Get rid of that debt!
2006-08-14 16:24:05 · answer #7 · answered by Frogmama 4 · 0⤊ 0⤋
get rid of it...then you won't have to pay interest and can invest any incoming $$$ into a account that you can get interest on....CD's, savings accounts, pass book, etc...
That is awesome....
have fun..don't charge up your cards again....it is easy to do....
2006-08-14 23:17:58 · answer #8 · answered by sleddinginthesnow 4 · 0⤊ 0⤋
yes...u will have a good credit score
2006-08-14 22:50:46 · answer #9 · answered by hen d 2 · 0⤊ 0⤋
do it all at once better for ur credit score
2006-08-14 16:24:31 · answer #10 · answered by smile4mel 2 · 0⤊ 0⤋