I've got 2 credit cards that are maxxed out at this time, but working casual it wasn't a problem for the bank to give me the cards to use but when I apply for debt consolidation then all these factors form and I'm told no go.
Another mistake I made, (which I should've known better) was that I applied for a number of online personal loan applications not realizing it would take the toll on my credit file history.
I'm going to close off one of the credit cards in early jan. (1500$) and the other one (4500$) will just be able to put 1500 and then ask to lower the limit.
My question is if I just pay off the card in one go (1500$) and haven't been keeping up with the normal monthly payments , will that show bad on my history?
I just want the cards gone... so pay off in one go, close card off .. will that be a bad idea and would it affect my prospects in applying for a loan in the future?
Cheers
oh and any other advice you want to offer to a troubled CC user.
Thanks :)
2007-12-11 12:04:31 · 7 answers · asked by troubledmuch? 1 in Business & Finance ➔ Credit
Don't apply for any cards for 6 months, this improves your credit score.
Pay down both cards so they are both around 40% as this will raise your credit score.
Don't lower your limit as showing that a bank trusts you with 4500 is good for your credit score
As far as not making payments the damage is already done on that one, but paying on them now does show that you made a mistake and are paying faithfuly now.
Now as far as how to pay, look not only at interest rate, but the amount you owe. If you have 1,500 saved up, throw it at the card that is charging you the most in interest (chances are the 4,500) and pay that one down aggresively and make a min payment on that one until the other one starts to charge more interest and then switch.
If you can not on the other hand make two min payments due to missed payments and can pay one down so you only have one payment then do that. It's better to have a chunk gone, all at once then have missing payments.
Finally do not close the credit cards! The longer you have the cards the better off you'll be. Bouncing from one card to another to another is not good for your score. Instead chop that card into bits and get rid of it! you can't pay with out the card, so keep the points not the debt!
Hopefully this will raise that score a little! Good luck!
2007-12-11 12:56:27 · answer #1 · answered by chickennosenshi 4 · 0⤊ 0⤋
Don't cancel the cards. That will adversely affect your credit score. Go ahead and pay them off, of course. Paying the $1500 all in one lump won't hurt your credit score any further and will save you interest charges. But keep the cards open even if you don't use them, and don't ask for the limits to be lowered. The more available credit you have, the better your chances for a future loan.
2007-12-11 12:17:06 · answer #2 · answered by Anonymous · 0⤊ 0⤋
Go ahead and pay the card off just don't close the account and don't ask for the limit to be lowered. This will hurt your credit score beleive it or not, paying it off won't but closing the account or lowering the limit will. As far as for you future you should check out Dave Ramsey "The complete Money Makeover" and don't become a debt slave again. If you can't buy it cash you can't afford it.
2007-12-12 07:57:11 · answer #3 · answered by jt6341 3 · 0⤊ 0⤋
Don't lower the limit or close the card unless you have self control problems. Having old cards with long histories and unused line of credit is good for your credit score. If you close them, you just get the negative points for the late payments.
2007-12-11 12:15:02 · answer #4 · answered by Ted 7 · 0⤊ 0⤋
you should not close out your accounts..because the longer you have one or two or more open accounts with revolving credit that show good standing,the better your credit looks tolenders.
just pay them down,and put them away so you dont have them on you when you are out....once you get them paid down,then just go out once in awhile and splurge on something little for yourself ,like a sweater or new coat or something that you know you can pay off in full the following month.
keep your payments on time - this is very important !! when a lender looks at your credit history,they look at the accounts you have open, there standing,and if you have been paying them on time
2007-12-11 13:01:49 · answer #5 · answered by country_girl 5 · 0⤊ 0⤋
the worst thing to do is close an account, pay it down and be within 30% of the max and you should be fine.
At this site there is a manual that you can download =if that don't work email me and i will paste the attachment
2007-12-16 11:03:21 · answer #6 · answered by Herman 4 · 0⤊ 0⤋
www.daveramsey.com
2007-12-11 14:37:59 · answer #7 · answered by jeanniep 5 · 0⤊ 0⤋