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"Hypothetical" If you pay off all your debt except your morgage, is it enough to keep your credit afloat at a high score?

Or do you need to create more revolving credit? Or use a credit card and pay it off each month? If so what is a good credit card to look for?

Answer Question
 
MumFerg

Asked by MumFerg at 9:16 PM on Oct. 11, 2008 in Money & Work

Level 1 (0 Credits)
Answers (10)
  • AS LONG AS YOU DON'T CLOSE THE ACCOUNT i BELIEVE KEEPING JUST YOUR MORTGAGE IS FINE. I WOULD OCCASIONALLY USE THEM TO KEEP THEM CURRENT. cLOSING OUT ACCOUNTS IS BAD ON YOUR SCORE THOUGH.
    myboogiewoogie

    Answer by myboogiewoogie at 9:19 PM on Oct. 11, 2008

  • closing your accounts are only "bad" short term...LONG term there is NO effect.
    SAHMinIL

    Answer by SAHMinIL at 9:20 PM on Oct. 11, 2008

  • I DIDN'T KNOW THAT, THANK YOU!
    myboogiewoogie

    Answer by myboogiewoogie at 9:23 PM on Oct. 11, 2008

  • Well I say long term there is no effect, because I assume that if a person that has worked hard to get out of debt will STAY out of debit. Have you ever heard of Dave Ramsey?? He'll tell you that your FICO score is an "I love debit score".

    You can listen to him yourself here: http://www.daveramsey.com/tdrs/index.cfm/Credit-score You'll want to listen to the audio clip under the heading "Small Credit Score? Big Whoop!".
    SAHMinIL

    Answer by SAHMinIL at 9:37 PM on Oct. 11, 2008

  • sorry the link didn't turn out clickable, I'll try again. http://www.daveramsey.com/tdrs/index.cfm/Credit-score

    SAHMinIL

    Answer by SAHMinIL at 9:37 PM on Oct. 11, 2008

  • My dad has his book.... I really should see if I can borrow it.
    MumFerg

    Answer by MumFerg at 10:03 PM on Oct. 11, 2008

  • I love Dave Ramsey. Screw your credit score. If your not planning on going back into debt you don't need it anyway. But to answer your question, paying your mortgage will be fine.
    Anonymous

    Answer by Anonymous at 10:43 PM on Oct. 11, 2008

  • There are many factors that affect your credit score. And contrary to what the prior anon said, your credit score is important for a lot more than just more debt. Many people are basing everything from rentals to school to employment decisions at least in part on a persons credit rating.

    Pay off your debt, keep your mortgage up to date, and don't close any accounts that you've had for 3 years of more if you can avoid it. Make small purchases and pay them off each month to avoid any interest and finance charges.
    jespeach

    Answer by jespeach at 4:24 AM on Oct. 12, 2008

  • The longer you've had an account, the more it will up your score. You should have 2-3 credit cards, be they Visa or a store card, and never more than 3/4 of the available credit being used for more than one month. Pay more than the minimum if you have a balance. And make sure your utilities are paid. If you can do that, you'll have a very good or even excellent rating, depending on how long you've had your current accounts.
    jespeach

    Answer by jespeach at 4:24 AM on Oct. 12, 2008

  • Hey, girl! To answer..YES. In fact, having a mortgage which is paid fully and in a timely manner..consistently..can improve your credit score. This is one of the ways people build credit, even..by having these mortgages/loans and consistently paying on them.

    My mom is a financial advisor (licensed) and my husband manager of an auto dealership, meaning he works with credit scores all day. Any other questions, I can ask one of them for you!
    catholicmamamia

    Answer by catholicmamamia at 8:27 PM on Oct. 20, 2008

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