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I have 2 CC's and 2 department store cards

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asked: Paying off credit cards in full or in several months-which one will increase credit score fast?
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Best way to pay off credit cards- in full payment
33% 33% 
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Best way to pay off credit cards- in installments
66% 66% 
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nobody



Joined: 26 Jun 2008
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Posts: 1



30 Magic Points

Subject: Which one will increase FICO faster-Pay credit card balance
 
Posted on Thu Jun 26, 2008 8:18 am  

none
goodnatured



Joined: 03 Nov 2007
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595 Magic Points

 
Posted on Sun Jun 29, 2008 1:56 am  

okay, nobody, what is none mean, none what?
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Mary

Mary

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17426 Magic Points

 
Posted on Mon Jun 30, 2008 7:20 am  

Hi Nobody
Paying credit card balance regularly improves your credit history. This credit history constitutes about 35% of your credit score and hence improves your credit score. Now apart from this if you spend not more than 30% of your credit limit, do not go for new lines of credit and if you use a credit card which is much older, then your FICO score will definitely increase faster.
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goodnatured



Joined: 03 Nov 2007
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595 Magic Points

 
Posted on Tue Jul 01, 2008 12:54 am  

great advice mary, could not have said it any better.
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lostrikan24



Joined: 07 Jul 2008
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1562 Magic Points

 
Posted on Tue Jul 08, 2008 5:18 am  

Ok, I understand the reason for keeping 30% of your credit limit as a balance in order to make timely payments and build up a trustfull history for lenders to see. My goal is to pay some cards flat out and leave them open. I am trying to really lower my debt-to-credit ratio by a huge percentage. This can also raise your FICO score. The question is, which way would work better? Maybe keep a 30% balance on one card and pay off the rest? I have 2 CC's and 2 department store cards.
Justin

Justin

Joined: 17 Jul 2006
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28944 Magic Points

 
Posted on Tue Jul 08, 2008 8:32 am  

Hi lostrikan
Actually, it is not that you should keep 30% of the credit limit as balance but you should actually spend not more than 30% of the credit limit at a time in order to increase your credit score. After making purchases upto 30% of your limit, pay back the money first and then re utilize the card. Since you have 2 ccs and 2 departmental store cards, try to spend a maximum of 30% from all the cards taken together. But make sure you pay back on time.
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lostrikan24



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Posted on Tue Jul 08, 2008 9:54 pm  

Hey Justin,

Thanks for explaining that. That was pretty much what I meant. My plan is to pay off one CC and one department store card off completely. With the other department store card I will purchase and pay off accordingly and keep one CC for disaster back-up. The thing to remember is that any loans also play a part in the percentage. I believe many of us make this mistake, I did. Let's say that a loan started at $7,000. And it has been payed down to $4,000. That $4,000 is considered as debt while the original $7,000 is the credit limit even though we cannot use the $3,000. So this should be played into the CC debt and other debt in order to calculate the percentage. Please correct me if I am wrong...
goodnatured



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Posted on Wed Jul 09, 2008 2:35 am  

this is confusing why can't you use the $3,000 that is paid down?
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lostrikan24



Joined: 07 Jul 2008
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Posts: 23



1562 Magic Points

 
Posted on Wed Jul 09, 2008 3:30 am  

That is because it is a loan. If you take out a loan for $7,000 and pay it down to $4,000, there will be $3,000 payed off. I was told that the credit goes by the full amount and not just that only$4,000 is still owed. This means that we were 'credited' $7,000 in their eyes until the whole loan is payed. It's untouchable credit and may help if we only owe a small amount on the original loan. Still lost? =(
goodnatured



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595 Magic Points

 
Posted on Thu Jul 10, 2008 2:34 am  

okay, that makes more sense, so it is not an open line of credit. Sorry to hear that. Maybe you can pay it off and be done with it right? Hopefully this all works out for you.
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Goodnatured,
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for all the ways I make $$ online
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lostrikan24



Joined: 07 Jul 2008
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Posts: 23



1562 Magic Points

 
Posted on Thu Jul 10, 2008 3:03 am  

Goodnatured,
I don't have this loan. It was used as an example. I do have other loans. For example, I have car and motocycle loans that do fall into this category. I had no idea that these affected my scores like this. Isn't credit handling so confusing? Drives me nuts... =(
goodnatured



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595 Magic Points

 
Posted on Thu Jul 10, 2008 3:34 am  

Yeah, it can be a headache that is for sure, but once you start learning it, it gets pretty interesting. Especially when you start learning about the collection agencies and how to shut them down. I really enjoyed learning that part.

I have a collection agency that violated the heck out of the laws that is sueing me in civil court, it have been almost two years since the original summons, now back in January they sent it to arbitration, well that was supposed to happen around February, here it is July and nothing has happened at all. I just learned some stuff on here the other day that will help me with the arbitration if it ever happens.

Later Very Happy
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Goodnatured,
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CMBV22

CMBV22

Joined: 08 May 2008
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5598 Magic Points

Subject: Which one will increase FICO faster-Pay credit card balance
 
Posted on Thu Jul 10, 2008 7:21 am  

This will give you a good payment history and show you can manage your credit
goodnatured



Joined: 03 Nov 2007
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595 Magic Points

 
Posted on Thu Jul 10, 2008 3:44 pm  

Take about three months to make sure that the new informaion goes on your report.
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Goodnatured,
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erb1953



Joined: 31 Dec 2007
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Posts: 547



-100 Magic Points

 
Posted on Sat Jul 12, 2008 3:05 am  

You should pay it over a period of time, not all at once, this will establish a payment history that will reflect on your credit report. A history of payment history is an important part of your credit report.

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