Post # 1
Me and my husband want to buy a home here in SoCal, now that the wedding is thru and his reenlistment is guaranteed, we are in the clear. The only thing keeping us is our credit. I have decent credit, his not so much. Combined, we owe under 10k in loans and debts. With some careful planning and scrimping, we could pay it off in about 4 months. The only issue keeping us from that is everyone saying that “low and slow” is a better credit boost. We’d personally rather just get it over with so we can start really saving for a down payment (even though with the VA loan we don’t need one). Should we do like everyone is saying and just make payments over the course of several months, or should we just make big lump payments and get it out the way? (Keep in mind that we both have credit cards we use for day to day purchases that we pay off biweekly)
Post # 3
I would get rid of any and all credit card debt ASAP!!!
Post # 4
- Wedding: April 2014 - Italian Villa
It depends on what kind of loan it is.
Student loans- it doesn’t matter how much you owe as long as you pay on time.
Other credit loans- The less you owe, the better!
So, pay down credit cards, car loans, etc, first.
I used to work for a mortgage broker.
P.S. If you have any questions you can PM me
Post # 5
No debt is good debt! I have an almost insurmountable amount of student loan debt, and my goal is to PAY IT OFF.
Post # 6
When my fiances dad paid off his house/credit cards/vehicles in one lump sum after his company was bought out, his credit score went down, so I would take that into consideration too. As long as you’re paying above minimum payments and you’re not behind I say pay it off within a few months.
Post # 7
We’ve paid off debt in the order of the interest rates. Darling Husband had a couple of student loans at 6.8% so we paid those off asap in lump sums. Other, lower rate debt gets paid off in chunks as we go. It’s not terrible to carry some small amount of debt and pay it off regularly as a boost to your credit scores.
Post # 8
@RunnerBride13: I thought using the credit card then paying it off was a good credit boost?
@gingerkitten: thanks I will definitely keep you in mind!
Post # 9
I’ve voted lump sums because no debt is good and having a high debt to credit ratio works against you. HOWEVER, the nest way to build your credit score us to make monthly payments on something. So you can either pay off all but one if the debts ando continue to make payments on one, or pay it all off and set up some regular bills like cell phones and utilities to do auto pay from a credit card, then pay it off every month. Whatever you do, don’t close any of those accounts if any of them are revolving Debt. Length of credit history is another big factor when calculating credit score.
Post # 10
@MsJ2theZ: Having a cell phone contract won’t help your credit score, but if you don’t pay it, and it get sent to collections it will have a negative impact on your score.
Post # 11
I hate debt and would try to get rid of it as soon as possible
Post # 12
Lot’s of people tout low and slow. Sadly, they are ill informed. Basically, credit rating agencies only care about you paying off your debt. They don’t care how long you take to do it so long as you make a payment. Because of that, you are better off paying off a big debt as soon as possible, in order to avoid paying as much in interest.
If you want to carry credit in order to continue boosting your score, you would be better off employing the grocery method. Budget your groceries as you always do, make your purchases on your credit card, then pay off your card completely either immediately, or immediately before it would accrue interest. You don’t have to carry debt over from month to month in order to improve your score. Since you guys are doing that anyway, paying off your debt is an excellent next step.
Here’s some helpful info you and your fi might want to look over.
Credit Score overview:
How to raise your credit score
In case you want some reassurance, my credit score is phenomenal. Seriously. Anytime I have to apply for something, people do a double take.
Post # 13
@tphotog: I think you misunderstood. I said to pay some bills such as their cell phone bill with the credit card and pay the credit card bill to build Their score.