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Best way to pay off credit cards and increase credit score

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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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Total Votes 24
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herbolaryo



Joined: 10 Jun 2008
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Posts: 1



384 Magic Points

Subject: Best way to pay off credit cards and increase credit score
 
Posted on Tue Jun 10, 2008 2:57 am  

1. Some say that it is will increase FICO score faster if you leave out a balance in your credit card payment Question
2. Some say that if you pay in full immediately, FICO score won't be affected because you did not show a real history of credit history. Question
3. Some say that you need to have a balance of 2-3 months before paying in full so that it will affect your credit score. Question

Which one are true and which one are just myths?
Kindly give links to support the truth regarding credit cards
carol

carol

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Location: Los Angeles, California


30065 Magic Points

Subject: How to increase credit score
 
Posted on Tue Jun 10, 2008 6:57 am  

Hi Herbolaryo
If you want to increase credit score, it is advisable not to put up big balances in your credit card as it hurts your credit score no matter whether or not you pay the bills in full each month. It however does not mean that you should not pay off your balances in time, You should always try to make regular payments, but what gets reported to the CRAs is the balance reported on your last statement. So try use your credit cards lightly and don't put huge balances in it. It is advisable to spend 30% to 35% of your credit limit. In this way you can increase your credit score.
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scott

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10890 Magic Points

Subject: Ways to increase credit score
 
Posted on Tue Jun 10, 2008 7:14 am  

The fact that you need to have a balance before paying the debt in full to increase credit score is not correct. In fact paying off the debt in full does not hurt your credit score, it usually helps in improving it. It's quite true that paying off credit cards increase credit score. If you make payments on time, it will add to your credit score, no matter whether you have a balance left on your account or not.
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SCOTT

Use your credit account responsibly and enjoy a debt free life.
fireyone



Joined: 26 Feb 2008
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130 Magic Points

Subject: Ways to increase credit score
 
Posted on Tue Jun 10, 2008 10:10 am  

Okay I myself am trying to figure this out too. So if you only make a major purchase on your NEW card and pay it off in two monthly payments does it help? I also hear a lot about always leaving a small balance on a card and making monthly payments to establish a payment history. What are the easy ways to increase credit score?
goodnatured



Joined: 03 Nov 2007
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538 Magic Points

Subject: How to increase credit score?
 
Posted on Thu Jun 12, 2008 12:50 am  

you need to pay a little bit at a time to establish a credit history, paying it off all at once will not establish this history needed.

So my advice is to pay in monthly payments.
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Justin

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28944 Magic Points

Subject: On time payment increase credit score
 
Posted on Thu Jun 12, 2008 7:13 am  

Yes, I agree with you goodnatured. But you should always pay back the amount in time and never be delinquent. Delinquency always negatively affects your credit report and has a bad impact on your credit history. I would prefer to pay my regular bills through these cards and repay them on time for building a good credit history.
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sdchargers_63

sdchargers_63

Joined: 13 Aug 2007
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1916 Magic Points

Subject: How credit card increase credit score
 
Posted on Sat Jun 14, 2008 2:03 pm  

In some cases, people CAN'T pay the balance off in 'one lump sum'. But, it will increase credit score. My opinion, of course.
goodnatured



Joined: 03 Nov 2007
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Posts: 3931



538 Magic Points

Subject: Best way to pay off credit cards and increase score
 
Posted on Sun Jun 15, 2008 9:11 am  

The key to raising your score is to have a positive payment history, so pay it in several small payments and be on time with your payments.

I have been trying to reestablish a good credit rating, it takes a long time and it takes a lot of discipline, sometimes I slip up and when I do, one mistake will cost you months and months of work.
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C Hertan
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Subject: closing credit card
 
Posted on Tue Jun 17, 2008 10:34 pm  

I have a credit card which I have paid off sometime ageo and decided that I will not ever be using this card again and want to close the account. Will this hurt my credit?
goodnatured



Joined: 03 Nov 2007
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538 Magic Points

Subject: Keep the card open to increase credit score
 
Posted on Thu Jun 19, 2008 1:08 am  

yes, because you have now lowered your available credit by closing the account, if you pay them off and leave them open it keeps your available credit higher. So closing them does affect your score.
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for all the ways I make $$ online
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Justin

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Subject: Easy ways to increase credit score
 
Posted on Thu Jun 19, 2008 9:40 am  

Hi C Hertan
Credit history constitutes about 35% of your credit score, and so old credit cards count a lot in improving your score. We all know that credit card increase credit score. Since you had paid off your credit card dues, maintaining the card will in fact increase credit score. If you close it down, it will lower down your credit score.
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goodnatured



Joined: 03 Nov 2007
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Posted on Sat Jun 21, 2008 5:08 pm  

wow, I did not think that it constituted that much of your credit report, I knew it was a big part, but never imagined that it was that much.

I know that closing it willl lower your score because it takes away from your available credit. Closing it will definately lower your score.
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Goodnatured,
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for all the ways I make $$ online
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Justin

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28944 Magic Points

Subject: Credit score components
 
Posted on Mon Jun 23, 2008 6:19 am  

Hi Goodnatured
There are five major factors that determines your credit score. Among them, the credit history constitutes about 35% of your credit score, about 30% of your credit score depends on the amount you owe, 14% depends on the length of the credit history, 10% of your credit score depends on the types of credit you owe and 10% depends on opening any new lines of credit.
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anthony

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Joined: 31 Jul 2006
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13609 Magic Points

Subject: Do not close, keep open the card to increase credit score
 
Posted on Mon Jun 23, 2008 6:31 am  

Yes, it is true that if you want to keep your credit score in a better position, it is essential that you do not close down your old credit account as it will affect your credit history which is in fact the most important determinant of your credit score. Moreover, you should not apply for or open any new lines of credit within a short period of time. This is because as soon as you apply for a new credit, a hard inquiry is made which gets reflected in your credit report. More and more hard inquiries implies that you are credit hungry, which in turn lowers your credit score. Paying off credit cards increase credit score only when they are maintained properly.
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goodnatured



Joined: 03 Nov 2007
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Posts: 3931



538 Magic Points

 
Posted on Wed Jun 25, 2008 1:53 am  

True, You bring out some really good points about closing an account and the issues of applying for new credit. Both will lower your scores, great job on this post.
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for all the ways I make $$ online
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