Which is better for improving my credit score?
I have a credit card with a balance of 12,000 dollars. My credit limit is also 12,000 dollars. What will get me more points on my credit score, A: paying off the entire balance at one time. B: Paying a set amount each month, for example, 2,000 dollars every month until the card is paid off? Which option will be better for my credit score and earn me more points? Thank you, 10 points and much thanks for anyone who can help me with this.
Public Comments
- pay the $12,000 all at once
- Paying the min. payment ON TIME... This will build your score by showing them you are responsible. You can always pay more but should try to build by making monthly payments...
- Your score is based, among other things, on your debt-to-income ration. The less debt you have, the better the ratio and the better your credit score. If you can afford to pay it off in full then you absolutely must do that.
- Put me in the with the people that voted to pay it off NOW. RIght now if your credit limit is 12k and you owe 12k you are one credit card cycle away from going into default by going over your limit. If that happens, your interest rate is going to go to about 25 - 30% If that happens, then your 2k pay off will cost you waaaaay more money then paying the 12k at once. I agree with the debt to income ratio explanation stated by the poster above.
- That all depends on how fast you want to raise your score. If you pay interest, your score grows faster. So you can pay off half of the amount. Then you should pay 2000 dollars per month for next 3 months. That will help your score growing faster. But always remember maxing out a card is not a good option. If your total credit limit is 12k (assuming you have only this credit card) , spending 12k affects your credit score. Also check http://www.cashorcredit24.com for credit card related information
