How can I improve my credit score? (Long run)?
My credit score is 673. I have 3 credit cards all of which are nearly maxed out (yes, i do realize this is affecting my credit score). I also just bought a car. The payoff amount on that is $20,000 (about). So basically those are my four revovling accounts. What I'm asking is do I need to keep my credit cards at HALF balance everymonth or should I be paying them off IN FULL every month? And for my Toyota I should be able to pay it off by January '08 but is that the best thing to do? For example, should I pay forsay 10k off and refiance my loan so my payments are lower and just continue to pay my car loan off in the 5 year contract? I'm 19 and VERY naieve about credit as you can probably see by my 3 maxed out credit cars and brand new car purchase this year. I decided that by the time I'm 21 I want to be able to have credit good enough to buy a house or something. So for all you seasoned people out there I'm just looking for a little help. :o) Thanks for your time!
Public Comments
- You will find helpful information at www.genesiscreditgroup.com
- its not so much how to help your score, its how NOT to hurt your score...The main things that hurt your credit score are. 1. Allowing bills to go into collection, or bankruptcy 2. Not paying your bills timley. 3. Having credit cards near their limit. Creditors really dont care how much debt you have normally, they just dont want to see cards maxxed out.So therefore open abother card and transfer 1/2 the balance. Its better to have 2 cards at 1/2 there limit then 1 card at its limit. 4. Constantly opening and then closing cards. If you can avoid these things, your score will go up over time. By the way, for the person below me.. you can still easily buy a house with credit card debt. My broker told me about 90% of his clients have credit card debt when go to buy homes. They just factor in your min monthly payments as part of your debt ratio when they are looking at how much you can afford.
- At 19 you are much better then most people your age. Good for you. From what I understand in order to buy a house you have to have no credit card debt, though I have heard that even a minimal CC debt is better. I guess it depends on who you ask. but bringing down your CC debt will raise your credit score, but don't pay the whole thing off. Keep a small balance. As far as your car, I'm sorry I don't know. But I'm going to keep an eye on this question. My husband just refinanced his car loan and I'm curious, after reading your question, if it was good for his rating.
- Over the long run, I would work on getting my credit card debt taken care of first and start working on paying the car loan second. Do not close the credit card accounts after they are paid off. Age of accounts is one of the major factors in your credit score. Pay the car down as much as you can while working on the credit card debt (but do not lose track of your credit card goal) Once the cards are paid off, refinance the car and you should get a much lower rate. When you use credit cards, keep the amount owed at 50% or less and pay the amount due in full every month. Good luck
- stop writing bad checks..
- If you can pay off all 3 credit cards this month, DO IT!!! If not, pay them off as soon as humanly possible. Then cancel 2 of them. If you haven't already, save at least $1000 for an emergency fund. When you have all 3 credit cards paid off and the emergency fund established, pay off the car. Don't refinance it. Remember that a car loan is a loan. You can pay back however much you want on a monthly basis, as long as you pay the minimum amount (your current monthly payment). You can switch from the payment book you were sent to a monthly statement to keep track of how much you owe. Paying off your car loan early will save you big $$$ on interest payments. So if you can pay off your credit cards and the car in the next 2 years (when you're 21), do it. Once you've gotten everything paid off, save up 3-6 months of living expenses AND enough money for a 20% down payment for a house. Keep track of your credit score. It may take longer to realize a higher credit score, since changes are not made overnight. Once you've paid off your credit cards, your score should rise. Keeping credit cards paid off and making timely payments on your car and other bills will raise your score too. The biggest factor in repairing a credit score is time. The longer you go after having paid off your credit cards and car without accruing additional debt, the higher your credit score will rise. Your credit score is only one piece of buying a house, not the whole outlook that lenders look at for when considering a loan application for a house.
- First, it would help to know what makes up your score. Here's a breakdown. Payment history 35% Amount of debt that's owed 30% Length of time that credit's been established 15% Types of credit 10% Inquiries and New accounts 10% With those maxed out cards and that car note, that's affecting 30% of your score right there. You need to get those cards paid down ASAP, not just to bring your available credit back up again, but also to keep from having to pay unnecessary outrageous interest. My suggestion is to pay off the credit cards first, keep the usage to where you can pay it off in full every month. Also, the quicker you pay off the car note, the better your score gets because by reducing your debt owed, that would increase your score as well
- It's always best to pay your card off at the end of the month (keeping a balance on your card does not affect your score, it just makes you pay more interest!). Like the other people say, paying your bills ON TIME is the best way to increase your score. Also if you can decrease the total debt that you have, this makes you less of a risk to lenders and credit card companies, which can increase your score.
- it will be better for u to pay them off in full or half balance and always pay your bills on time..
- listen, everything you need to repair your credit is located at: http://www.thecreditrepairmanual.com
