Your Questions About Pay Off Credit Card Credit Score

Maria asks…

What happens to your credit score if you pay off all your debt and never get another credit card?

I have a tremendous amount of bad debt. Almost 2000 dollars. If I were to pay it all off to 0 would it raise my score or just keep it from getting lower? I have no intention to EVER EVER EVER have another credit card. my credit score is in the low 500s what will happen if I pay off all debt and do nothing to raise my score?

richmama answers:

It would improve your score a bit, but if you never get a loan or use a credit card again, your score will NOT go up. After having a bad run of using credit unwisely, you have to reestablish yourself and show you actually CAN handle money. If you never borrow again, you haven’t shown you learned from your bad experience, and it won’t show that you can pay bills on time.

George asks…

What to do about credit cards I got when I was 16, and how to pay them off to better my credit card score?

When I was 16, I was a foolish kid and got tons of credit cards that I never paid off. Now that I am 20, and have a real job and am trying to get a house, I see that severly affected me. I ran a credit report on myself today, and my credit score is 550, and I have only $3000 in total debt, but around 10 creditors. They all have sent my debt to collections, and I threw all the information away when I was a kid. Now that I am older and want to fix my credit, how should I go about doing it? Are any of the credit cards invalid since I got them before I was 18?

richmama answers:

Yes… They’re all invalid. How you managed to get them before you were 18 I don’t know… But they’re all invalid. I’d just call up the credit agencies and start fighting them. That’s about the best you can do… Unless you just want to pay them off. Either way it’s going to take you a couple of years at the least to take care of the problem.

Donna asks…

Is it better to pay off one credit card at a time or pay equal amount on each card to raise FICO score?

Trying to raise my credit score. I have 4 credit cards. Should I pay one off at a time or equal amount to each card. Each card has almost the same interest rate and yearly fee.

richmama answers:

A big part of your score is based on the ratio of revolving debt to available credit limit. Carrying balances of more than 30% hurts your score. Best way to improve your score is to pay down the credit card balances.

If the interest rate is the same on all your cards, I suggest you concentrate on the lowest balance first, while making minimum payments on the rest. When the lowest balance is paid off, move to the next till they are all paid in full. Then only charge what you can afford to pay in full each month.

Since you are paying yearly fees for those cards, I suggest that after you pay off the balances, you call and request those annual fees be eliminated. If they refuse, close the account. There are many different credit cards that do no charge annual fees.

John asks…

how long after i pay off a unpaid credit card will my credit score improve?

I am going to pay off a credit card that I have owed and went to a collector this month.

richmama answers:

Ask lenders for agreement to delete this items from your credit report when paying them. I recommend to get such agreement thru credit repair agency, for example this one – freecreditreport.hotusa.org

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