Aug 28
I have 4 credit cards. One of them has a $100 dollar balance because I have paid it way down. Discover has a $900 dollar balance and the other 2 have $1400 dollar balances each. I plan on paying the $100 dollar balance card off today, and I make $300 dollar payments on each of them every month. Will it increase my FICO to pay the balance off of 2 of the cards and combine them all on a balance transfer to my Citi Bank card, or will it make my score lower? I want to make a higher score, and have been slowly digging my self out of debt since a bad divorce. Currently, my fico is 218.
My fico is 718, oops! I typed it wrong.
My fico is 718, oops! I typed it wrong.
If you cannot pay off the rest of your debt within the next 3 months, then, yes, you need to move everything onto one card with a very low rate. That is not going to hurt your credit, it is just going to save you finance charges.
Beware, though, that lower rate cards usually have a much higher minimum payment requirement, and if you are even one day late on your payment, they will raise your rate.
Your score will remain the same right now, because the score is based on how much debt to available credit you have, which you’re just distributing it around. Your available credit line will still be the same.
However, by transferring the amounts to a lower interest credit card (and I suggest that you cut up the other cards so you can’t use them) you’ll decrease your debt, and increase your available credit, thereby increasing your credit score.
If you are asking would all of this help your credit score the answer is your credit rating is based on if you pay your monthly payments on time and in full. So, keep what you have, dont chage anything around. Here’s an idea…Pay off the $100 like you said and do not charge anything else on it. Pay minimum payments in the $1400 cards until you get the $900 paid off which shouldn’t take more thana month or two if you are only paying the min pymt on the highest two. After you have paid off the $100 and the $900 cards, DO NOT touch them. Leave them at home, cut them up, just do not spend money on them. Now you are ready to concentate on your two biggest debts. Pay the min payment on one and knock out the other one as quick as you can. After you pay off the first $1400, then you have paid off all three credit cards quickly and hopefully without charging anything else on them. Now, attack the last one and it will be done in no time and you are credit card debt free. Check all of your cards. If you have yearly fees that are due on them, call the companies and tell them if they will not take those fees off of your account, you want your account closed and MEAN what you say. Try paying cash for things after you get these cards paid off. It is easy to do once you get used to it and realize that the cards are not your security net. The key is not to go back in debt on these cards. If you feel you might do that, destroy the cards and dont apply for new ones. You will feel so free after you get all of this done. Good Luck!!
Forget your FICO, You are in trouble and you need to get smart. Credit card debt is stupid debt. Do everything you can to get a lower interest rate and pay off all the cards AND THEN cut them up and call the companies and cancel them all. The pay off the final loan or card asap. Then worry about your FICO after you have gotten back on track. Think of the house you could pay for with all those payments. Credit cards should never carry a balance and if you are not able to control yourself you should not have them. There is also no reason to have more than one card.
I believe your on the right repayment track with your cards. As you pay the cards and reduce your debt then your score improves. There is software, free, that you input your debts and the software will tell you how much you need to pay off and how long it will take. It is a great tool to have in your debt management strategy.
Here is an article i found on debt consolidation with some information and different plan options.