Credit Advice

Have a question? Have advice to share? The combined knowledge and experience of everyone in the Credit Karma community can help you. Enter your question or help others below to get started!

Question

Posted in Credit Scores
Profile Image

Question By
myates72

0 Contributions
0 People Helped
Should I pay off all my debt at once?
I am selling my home and will have enough money left to pay off all of my credit cards and car loan. I want to improve my credit score and overall credit. Should I pay them off all at once or make several large monthly payments? After I pay the credit cards off should I close them?

Your Credit Scores Should Be Free. And Now They Are.

View your scores and reports anytime.

SIGN UP NOW
All Responses

Result 1-1 of 1Results per page: 5 | 10 | 25Page 1 of 1   Previous | Next
Top Contributor
1884 Contributions
3682 People Helped
Most Helpful Response

Nebver close a credit card account.

Helpful to 1 out of 1 people

That would lower your credit score. 35% of your score is based on the number of open accounts you have and the available credit to debt ratio.  So NEVER close a credit card account on your own.  If you don't want to use the account any longer, Cut up the card or put it away in a drawer and don't use it. Let the creditor close the account (usually after a few years of non use)  The only accounts i recommend closing are accounts that charge an annual fee to keep the card.

Paying the cards off, weather all at once or over time makes little difference. But paying them off completely will. Some Credit Bureaus will lower your score if you owe $0. lenders like to see between 10% and 20% usage. If you're not planning on opening any new lines of credit or getting a new mortgage  Then pay them off and don't worry about it.

Good luck

I would would check with the lender on the auto loan, Many have high fee's for an early pay off, so you will have to decide if its worth it to you.  Also paying off the loan will reduce the diversity of the types of credit in your file as will paying off the mortgage on the house you sold. Both will have a negitive immpact on your score for a short while. Your score should bounce back after a couple of months though.

Result 1-1 of 1Results per page: 5 | 10 | 25Page 1 of 1   Previous | Next

Your Credit Scores Should Be Free. And Now They Are.

View your scores and reports anytime.

SIGN UP NOW

Reply to this Question

Write your response:
Enter Your Comments

The Credit Advice pages of the Site may contain messages submitted by users over whom Credit Karma has no control. Credit Karma cannot guarantee the accuracy, integrity or quality of any such messages. Some users may post messages that are misleading, untrue or offensive. You must bear all risk associated with your use of the Credit Advice pages and should not rely on messages in making (or refraining from making) any specific financial or other decisions.