I have to maxed-out credit cards - one with $1200 and one with $2500. I have $1400 cash that I will use to pay off some of this debt to raise my score. My question is what is the best way to split the money - which would help my score the most in short-term? 1. Pay off the $1200 to $0 and ue $200 towards the $2500 one? 2. Pay $700 each way? 3. Some other way? Any help is appreciated.
I really don't mind paying interest. I just want the score up in the short term - need to get financing on a purchase.
If you want to maximize the score, you need to get your utilization down. However you can do it to get the utilization on the two cards down. But in the long run, paying the highest interest rate is in your best interest. You might also want to see if you can get credit limit increases, which will also help the utilization.
If you can't afford to pay the cards down maybe you should work on that before trying to finance anything else. If I have learned one thing by fixing my credit, it's that I relied on credit too much in the past. If you pay off all your cards (which in your case is very do-able) you'll be amazed at how much free cash you'll have. I still use one card with a $6000.00 limit, but I pay it off every month (about $400 a month) to keep the good tradeline.
