Questions About Paying Off Debt
I have nearly $30K in credit card debt that I am about to pay off with a loan on some property that I own free and clear. The credit card debt has an very high interest from around 16% on some cards up to 23% because of cash advances and late pays in the past several of the cards I have been paying basically interest only for a couple of years.
My question is that when i payoff these debts next week, should I close some of these cards down, close all of these cards and open a few new ones with lower rates, request lower rates on these existing cards when I pay off? My credit score is a medium of 721 do to a credit repair company i used about a year ago and have been making my payments on time since then. My loan broker told me it would be higher if not for my debt to income ratio. I'm in the real estate investing biz and would like to keep some of these cards for emergencies as well as the ability to make home purchases in the future.
I thought I had read somewhere that it's good to keep "some" cards open and not shut them down.
Can anyone offer advice? What some of the consequences might be for paying these off......good and bad? I want to do this properly.
Thanks
Jason
If you have less than perfect payment histories on some accounts, KEEP THEM OPEN!
I got into a dispute with Capital One, and refused to pay a disputed charge - my only transaction on the account, i finially paid them off and closed the account, now the account shows as being closed with a less that stellar payment history. Wheras if i would have been smarter, I would have kept the account oper (nominal balances only as i don;t want them to earn any interest profit) for about 2 years, then all of the recent activity is perfect. Keeping accounts open for most people is not a prblem, it's the use and maintaining balances that causes the pain in the FICO.
Oh yeah, and hire a new loan broker, your credit scores have absolutely nothing to do with your DTI. He obviously doesn't know his business. The factors that provide yoru credit scores are well documented in this group as well as many places on the internet. and your income is one commonly mis-understood item,
Keep the accounts open for a few years and don't use them, your score will be higher than if you close them.
Thank You for the help.
I really apprciate your advice!!
Jason
Never close a card unless it has an annual fee that's more than you want to pay and it's not one of your oldest cards. Otherwise just sockdrawer it.