Would it be better for my FICO score to pay down balances over time...?
... as opposed to paying everything off in one sitting? I was just trying out the FICO simulator, and it seems that if I pay off the entire balance at once, my "simulated FICO score" does not increase as much as when I indicate that I will pay "x" amount every month for 3 months (eventually paying off the balances). So.... even if I have enough money to pay everything off at once, would it be better for my FICO score to pay it off over a period of 3-6 months???
Public Comments
- if the interest rate isn't too high pay over 3 months - if it's high - pay off now. just paying on time and keeping balances low or zero will help you in the long run
- The answer is yes. Actually, you should not really pay it off that quick. Pay all your accounts down to under one third of your credit line as soon as possible, and then pay about twice the monthly minimum until they are paid down to a few dollars. If credit cards, continue to use them with you always paying the entire balance each month except a few dollars. This will ensure that you get the best FICA scores. Having a lot of credit and never using it, is worse than having a small balance on it. Say five or ten percent of the credit line.
- is buying a higher score worth the cost -- that is what you are doing if you do not pay off your balance each month... i would go for paying the balance and using the credit card as a debit card and over time the score will take care of itself.
