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by dacmemphis on December 24th, 2006

dacmemphis

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I have a credit card with a balance of $6,000. I can pay this off immediately, or would it raise my credit score to pay off in three installmaents of say, $2000?

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  • by SarahK on September 19th, 2007

    SarahK

    What's your credit limit? I'd pay it in full (and on time) to avoid finance/interest charges. The $6,000 will still be reported, but your card will show "paid as agreed" data points on your credit report when you pull it. It doesn't matter if you make the minimum payment or pay off in full. The card reports whatever your current balance is to the credit bureaus. Utilization (balance-to-limit ratio) comprises 30% of your FICO score and is best to be underneath 10%, regardless of what other people say. If you don't believe me, check out what the folks at Fair Isaac & Company have to say. http://www.myfico.com will give you some FICO basics, but the forums get into more specific discussions.

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