Credit gurus....payment question

[zachary]

Read or look at question in bold...

My wife and I currently have some debt from remodeling that we are about to pay off in full. We are very particular about our credit and check it frequently. We have strong credit scores already(hers can almost not increase anymore) but I know when large amounts are paid toward a debt it helps your credit by debt to open ratio and the large payment itself. Is it better to pay off large amounts on CC's in one lump payment or break it into two payments across two billing cycles?


I know for sure that it makes a difference in score paying these large amounts down, two months ago I paid 5k off in one payment and got a 20 point credit bump the next month. So just wondering if you make two payments on different billings cycles will you get two bumps, or better to just make it one larger payment.

We have done this once before also, we remodeled had it on 0% CC's and paid it all off in full and noticed a 30-40 point credit score jump. Never divided for the benefit of two bumps, if it even works like that.

[CWO]

Any difference in score increase would be minimal, if at all. I doubt there would be a difference.


btw, I'm no guru, but I have done a lot of research on credit repair in order to improve my own. Your increase has to do more with the percentage of credit currently used. My guess is you would see a 40 (hypothetical) increase with a single payment or (2) 20 point increases with two payments or possibly a 25 point jump and a 15 point jump.

[zachary]

that is what I was curious about will it equal out to the same or be a little more beneficial for two

[quikag]

The benefit of "spreading" out the payments to help your credit score would likely be offset and then some by the increased interest expense.

Just pay it and be done with it.

[CWO]

The benefit of "spreading" out the payments to help your credit score would likely be offset and then some by the increased interest expense.

Just pay it and be done with it.

Good point. If it is a 0% interest card and you're trying to maximize your score, you might be better off spreading it out as long as possible, unless you need the better score sooner than later, like if you were trying to buy a house or something. If the card has interest on it, I'd pay it and get it done, as suggested.

[zachary]

all @ 0%, that is the only was we put anything on our CC' s

[quikag]

all @ 0%, that is the only was we put anything on our CC' s

Spread it out then if you don't mind making payments for a few more months or whatever. 0% is nice to have especially if you can keep the cash in the bank.

[46Tbird]

It's very annoying that this kind of information is not taught in public school.

This should be something that every American knows, seeing as credit score is now used as the basis for your value as a human being.

[mustang1200]

It's very annoying that this kind of information is not taught in public school.

This should be something that every American knows, seeing as credit score is now used as the basis for your value as a human being.

I'm a high risk human being then.

[Baron Von Crowder]

I'm a high risk human being then.

my parents always told me I wouldnt amount to much, guess that's what they were talking about.

[2011GT]

Bow to the all mighty fico

[A_A_G]

Pay it off. The more available credit you have, the better your score will be.

[CWO]

all @ 0%, that is the only was we put anything on our CC' s

If your goal is to maximize your credit score you should spread it out as long as you can if you're at 0%. Constant timely payments is something lenders look for and have a direct effect (affect?) on your score.

[Roscoe]

Pay it off. The more available credit you have, the better your score will be.

this

[CWO]

If he doesn't need a better score asap he would be better off making payments, ultimately his score will be higher that way.