OK, I'm clearing up my credit report and I'm wondering which would you pay first? Pay off a judgement from an apartment complex ($548) from 2 yrs ago; pay down 2 maxed out credit cards both with a $300 credit limit (opened this year). Both will get paid but i'm just wondering if it makes a difference which one should get paid first. Also, does anyone know how much this will affect the credit score when it's paid off after about 3 months? Thanks.
2007-09-13 16:07:57 · 10 answers · asked by tikki 2 in Business & Finance ➔ Credit
pay the judgement first because that is a complete negative, the credit cards you can just make the minimum payments and still have open credit. you just really want to get rid of the outstanding negaitive. also if your credit limits are only $300.00 dollars on the cards you may have a really hard time getting financed for a house because of the recent crash in the sub-prime loans. now you need real good credit and about a 20% down to get financed.
2007-09-13 16:15:23 · answer #1 · answered by pooh 6 · 0⤊ 0⤋
First, pay off the judgment. You won't get a mortgage with that on your credit.
Second, pay off the credit cards. Don't close them but only charge what you can pay off in full each month.
Third, you need to establish a consistent on-time payment history of at least one year and probably two.
Fourth, start saving for a downpayment.
It is also important that you know exactly how much house you can really afford. The house payment shouldn't be more than 1/4 of your monthly pay.
2007-09-13 18:25:56 · answer #2 · answered by bdancer222 7 · 0⤊ 0⤋
If you are maxing out $300 credit cards and can't pay a $548 back rent, you should not be buying a house.
2007-09-13 16:30:19 · answer #3 · answered by Anonymous · 1⤊ 0⤋
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2007-09-13 16:19:46 · answer #4 · answered by JEDI MASTER YODA 4 · 0⤊ 0⤋
pay as much as you can down on each of the 2 maxed out credit cards.
Then pay one off, and then the other.
Pay off judgment last.
The reason for the 2 payments is that it showed no maxed out credit cards, which will improve your score immediately.
Hard to know the overall impact since I don't know what else you have on your credit report.
2007-09-13 16:11:56 · answer #5 · answered by Anonymous · 0⤊ 0⤋
It does matters what you do first because your credit rating is based on many factors. The judgment is certainly reporting as derogatory. I would suggest you deal with that one first. Then, pay down your credit card balance to a manageable amount based on your budget as well as the interest rate they are charging you. As for paying it off, it is best to keep a balance on it.
2007-09-13 16:46:51 · answer #6 · answered by Gibby 1 · 0⤊ 0⤋
pay at least the min on the cards and pay the judgment off asap and make sure you pay all your bills on time as your going to find it hard to finance with your credit score so you need to build your credit up and that only done by paying your bills on time sad to say this may take a few years
2007-09-13 16:29:48 · answer #7 · answered by Magnusfl 3 · 0⤊ 0⤋
The judgement will be required to be paid at closing if it's not by the time you go to get your loan. If I were you, I'd pay it all off and then wait a year paying all of your bills on time before trying to get a loan to buy a home. Good luck!
2007-09-13 16:14:57 · answer #8 · answered by annazzz1966 6 · 0⤊ 0⤋
before buying a home, be debt free... and have money in the bank...
put 20% down on the home, or don't buy it. without 20% down, you must buy PMI insurance which gets a bit expensive.
2007-09-13 16:37:11 · answer #9 · answered by Anonymous · 1⤊ 0⤋
I reckon credit cards. And make sure your name isn't blacklisted anywhere.
2007-09-13 16:10:26 · answer #10 · answered by Renesme 5 · 0⤊ 0⤋