Hi All, First some background on me. In October of 2006 my father passed away. At that time I had a mortgage + home equity loan with a combined total of 265k. I also had 30k in student loans, 25k in consemer debt, and a 14k auto loan. Since I was basically living above my means, and was also facing the prospect of having to turn my parents property (valued at 350k) and IRA (65k) to a nursing home to provide for my mothers care, I decided the best thing to do would be to sell my house, move in with my mother and help with her care, and focus on using my salary (~80k), to pay off as much debt as I could for as long as I am staying there. In june of 2007 I sold my house, paid off some debt with those proceeds, and am saving the rest as an emergency fund while my salary goes to paying off credit cards. I wont be able to stay living with my mother forever, it is a horrible living situation, and she needs certain care and needs I am unable to provide. As a result, I am keeping a close ere on my credit score so that I am able to get a mortgage in a year or so. Currently my credit score ranges from 644-649 according to the three credit bureaus (courtesy of lending tree credit report services). So far I have manages to pay off 3 out 6 credit cards I have. In terms of trying to raise my score higher, would I be better off canceling these cards so that I have less availble credit showing on my report, or just keeping them and not using them. Thanks
If your goal is a higer credit score, you are better off keeping the accounts "open", and let the $0 balances help your overall utilization. If you close the accounts, your utilization will soar, as you will be left with three accounts with high balances. Keep them all open, and keep on doing what you're doing, they're all the right moves. When it comes time to really look for a mortgage, ask the lender how they view the "open accounts". Some lenders do not like to see a lot of credit cards, even with $0 balances. Per their requirements, they view them "as good as debt". Stick to what you are doing, and consider closing some accounts as your near the time for a mortgage. But..close the newest/youngest accounts, going in order of lowest credit limit to highest. Also, I commend you on what you are doing for your mother, you will be glad you did this later on.
^^^ That was a great answer, good advise (from what I've learned!) Also, I hope this helps you nad others. * This is a chart that tells how some things effect a perosn's credit score: http://www.creditinfocenter.com/creditreports/scoring/scoringinfluences.shtml * Here is a pie chart from MyFico that shows what makes up your credit score: http://www.myfico.com/CreditEducation/WhatsInYourScore.aspx Keeping those accounts open and not used is keeping history, which is good. If you deleted them or closed them, it would lessen your history, lessen your score. (If I am not interpreting this correctly, someone please correct me) I hope this helps!
A little off topic but have you checked into getting some in home care for your mom? Is she on Medicare? If so she may be eligible for Home health services for awhile, it's not designed for long term use but can help out for awhile. Other alternatives may be Primary care & adult day care, depending on where you live. The local Human resources department has alot of information on where to seek potential help. I don't know your particular situation but it may be worth your while to check into it. As for the credit part thats excellant advice listed above. I have a 0 balance Orchard card that is currently residing in my sock drawer. I don't want to close it because it's one of my oldest TL's. Kudos for seeing your finances in a real light and making a plan to deal with them! Tegleg PS Suzie thanks for posting those links...good stuff!
