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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 Old School on May 1st, 2007

    Old School

    For purposes of your credit score, it would probably be best to pay it off in installments. Or, in fact, it might be best to pay it down to about 1/3 of the credit limit and keep it there.

    Your FICO score is strongly influence by the amount of credit you have *available* to you. So, if you have credit cards with a total combined credit limit of, say $30,000, but no balance on any of them, that's $30k of debt you can get into.

    This would worry another lender, who would be concerned that if you used all those credit cars, you'd get into so much debt you wouldn't be able to pay back other obligations (e.g. a car loan).

    Here are some other tips on how to best manage your credit score:

    http://www.followsteph.com/News/Increase_Credit_Score.html

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