by Anonymous on February 17th, 2007

Question

Help answer this question below.

If we pay off everything that shows on our credit reports.Will it improve our credit and score?

Like
Report

Share:: Facebook; Twitter; Other

Answers. 5 helpful answers below.

by Someguy on July 30th, 2007
It may improve your score, but may not improve your credit.

Creditors like people who keep a balance. They make money off of the interest you pay. If you have no interest, you are not as profitable to them and they need to make that money somewhere.
Comments
Add a comment...
- Like
- Report
No comments. Post one | Permalink
by Old School on February 17th, 2007
Paying off your debts will almost always improve your credit score.

HOWEVER.....

One of the things that negatively affects your credit score is how much *available* credit you have.

Let's say you have 5 credit cards, all with $10,000 limits. If they are all paid off, the credit score algorithm is concerned that you could run up $50k in new debts, which could impact your ability to pay your creditors.

So, to improve your score, pay off AND close those accounts.

One more note -- items do get expunged from your credit history. It typically takes 7 to 10 years. Once that happens, those items are no longer used in credit score calculations.
Comments
- Close the newest accounts. Keep the oldest accounts open. that longer history is feeding your score more than the new cards are.
  
  Report
  
  by Someguy on July 30th, 2007
- Yep, there's an 'art' to optimizing one's credit score...:-P...
  
  Report
  
  by Old School on July 30th, 2007
- myfico.com offers a product that will let you play a "What If" calculator to your credit score. If you are looking to buy a home in the next 18 months, it would be worth the $80 to get it. It lets you maximize your credit score choices.
  
  Report
  
  by Someguy on July 31st, 2007
Add a comment...
- Like
- Report
3 comments | Post one | Permalink
by thinkin on February 17th, 2007
Yes will help but the points you get for paying it off is not more then the points you loss for having it on there in the first place.
We just bought a house I paid off some back bills that were on our report and it only raised our score like 30 points. The mortage company told me the best thing to do is get a credit card and use it and pay it down low for a couple months and that is beeter then paying off debts that are already on there.
Also the worst thing to have on your report is late house or credit card payments they hit you the hardest.
Comments
Add a comment...
- Like
- Report
No comments. Post one | Permalink
by TaoZen on February 17th, 2007
Yes.
Comments
Add a comment...
- Like
- Report
No comments. Post one | Permalink
by SaraZita on February 17th, 2007
Yes, it will improve but they will always have your history.
Comments
Add a comment...
- Like
- Report
No comments. Post one | Permalink