credit card question

Discussion in 'Credit Talk' started by sheriann, May 5, 2004.

  1. sheriann

    sheriann New Member

    I would like to apply for a mortgage, but have approx. $10,000 in debt. Is is better to consolidate my credit cards into one bill or keep paying extra on each individual one each month. I've paid off several & closed the accounts, now I hear that's not the best way. BTW, my payments are always on time & above the minimum required payment. Advice?

    Sheri Ann
     
  2. fingrrrl

    fingrrrl Well-Known Member

    It's not really an easy question to answer. Of course for you the most sensible thing to do would be to get a consolidation loan which would lower your monthly payments, lower the amount of time it would take to pay off the debt, etc, etc. But I have read that people with the best credit scores are the ones who pay over time, ones that show a monthly pattern of paying, thereby increasing their score, rather than just getting a lump sum from a loan to pay them off in one swoop. I don't know how soon you want to get a mortgage or what your scores are, but I would suggest if you want the mortgage very soon, then I would take the consolidation loan. But if you're willing to wait, continue to make your monthly payments and your score will increase over time, guaranteeing you a lower interest rate for your mortgage. Good luck!
     
  3. Hedwig

    Hedwig Well-Known Member

    Pay all of your extra on the highest interest rate card to pay it off fastest.

    Also, don't close your cards. In fact, you may want to call and see if you can get credit line increases. But don't use it. One of the factors is your ratio of balance to limit. Getting higher limits on cards you have is better than getting new cards, because new cards will cause your score to decrease for a while.

    Depending on your salary, $10K doesn't sound like a lot, unless your cards are maxed out, which kills your ratios.

    Get copies of your report directly from the three CRAs just to see what is on there.
     

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