How To Pay Off Debts?
What is the best way to pay off revolving credit lines like credit cards if the credit is nearly maxed out? Is it best to pay it all off in one payment or spread it over a few months?
I'm only concerned with how it will effect my FICO score (not extra interest, etc)
if you got the money, just do one big lump sum. if not, try making a payment a week or once every two weeks. you pay less interest that way and more principle.
Do you own a home? If so, find a broker and refi it quick. Rates are still good.
hope this helps,
clear2close
[addsig]
I don't think FICO is really impacted by whether you pay it in a lump sum, unless it drastically improves your ratios to do it now ... so from a FICO standpoint, the lump sum is probably best (remember, this is all kremlinology, only FICO really knows for sure).
On the chance that your next creditor will not be going strictly by FICO, but will actually LOOK at the report, I'd pay it off over no fewer than three reporting periods (months).
That way, it doesn't look like you transferred the balance elsewhere, or got money from a loanshark or anything too out of the ordinary.
Sure, you can say "I got a lump sum from a real estate deal", but when you're sweating an approval and minutes count, you don't want to have a loan officer calling you with that one question, and you missing his call and having the play phone tag and all that.
Thank you flacorps! That was the answer I was looking for. My ratios will be drastically improved as I literally maxed out my credit cards to pay for my first rehab deal. I'll set up a payment schedule to pay off my loans in 4-5 months. Thanks again!
dont for get to call the creditors and ask for increase every 6 months this all so reduces your debt to credit ratio
John
When you get the debt paid off,keep the account open and cut up the card. You can get 0% interest loans from Home Depot and Lowe's for materials to do a rehab for 6 months. Then payoff the loan when you sell your rehab.