Improving credit score for purchasing properties

11 Replies

Is there anyone on here that is a credit specialist??  I have always heard the having credit cards open for long periods of time shows you have good length of credit. So, I dont want to pay off all credit cards because that would leave me with little left, but I can pay off a few... Should I pay off the newest cards that i have had open for only a few years first and close those accounts and leave the oldest credit accounts open that i have had for more than 10 years?   I have about 5 credit cards, not tons of debt maybe $12k total between the 5.... I would like to pay the newest 3 off and leave the last 2 open which i have had for 10 years... thanks

When paying off credit cards, i think it is best to pay off the highest interest ones first.  

You can leave the accounts open but they would have a 0$ balance.  

What is your present credit score. That tells a lot about where you stand and what you need to do.

@Todd R.

Good strategy.  Some of my best friends in this business have been credit cards.  Keep up the good work, build that credit!

I agree with the notion of paying off highest interest cards first (and fast).  Having them at a $0 balance does not adversely affect your credit score.  Consequentially, leaving balances on multiple cards can adversely affect your credit and ability to obtain new loans (debt to income ratio)

Why would you want to close them out? Pay them off if you can and use them for something recurring (like netflix) and then set them to auto pay the balance every month. As long as you are using them they typically won't close them on you. And I don't see any reason why you would ever want to close them yourself.

Your credit score would not be negatively affected by having an open credit card with a zero or low balance. Not sure you need 5 though. You might be better off closing 1 or 2 and then asking the other 3 to bump up the limits.

Credit cards do come in handy when it comes to your ratios. If you have a balance of 5k and only 10k available, thats not good and you will lose a few pts. 5k balance total and 50k available, thats not going to ding you much, if any.

I am no credit professional, but in my opinion i would not close any accounts you have open. I would pay off all of your cards if you are able to and use each of them every month. Paying them off every month is a good option but so is leaving a small balance on them. If you choose to leave a small balance i would suggest no more than 30% of your total limit. In turn I would also call and try to have your limits increased every 6 months. 

@Todd R. Credit scores have a lot to do with you balance compared to your credit limit.  I agree with @Jordan Norr with keeping your balances under 30% on all cards.  This will increase your scores.

The Credit Karma app is actually helpful and very user friendly. I assume it’s fairly accurate and has been a nice resource to help me and my wife stay on track.

You do need to talk with a credit repair professional. I know of someone who you can talk to and you can ask him questions if he can help with your situation. He charges reasonable fees but he will tell you if he can help you or not. If he doesn't there is no charge. Take a chance. Also, you may need to know that owning a home now is less expensive for you than renting. If you can solve this problem and re direct your goal to owning a home - that will be more beneficial for you in the long haul.

Would love to help but you're not providing enough info. What are the real issues with your credit? Just high balances? 

A few tips:

Prioritize the high interest payments and "snowball" to the lower interest. 

Do not close out old accounts. The older the account the better. 

Call your card companies and ask for credit limit increases, its a ratio. The higher your limit, the lower your utilization rate. 

If you have any late payments, nicely ask them that in the spirit of being a customer see if they can help you out and remove them. If that fails, dispute the delinquencies. Oftentimes they don't do their due diligence and they get removed. 

Find someone you know well and trust. Have them add you as an authorized user to some of their good, clean, long term accounts. They'll be sent another card but you never have to see it. Shred it for all you care. 

Reddit has a great credit repair wiki in the Personal Finance sub forum.

I recently disputed a handful of old "dings" and went up about 50 points in a later of weeks. 

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