To get the highest score possible (as it pertains to credit cards,) you would have three or four high limit credit cards and they would be completely paid off. But don’t run out and close down cards – it’s not that simple!
Step-by-Step Credit Card Wrangling
(Move down the list until you run out of dough or you become happy with your score:)
1. Ask your higher limits from your credit card companies. Higher limits equals better ratios. Careful: If they pull your credit report it will create an inquiry and that might lower your score a bit.
2. Pay down any cards that are over-the limit until they are within the limit.
3. Start paying cards completely off one-at-a-time. (Don’t close them.)
4. If you can’t pay anymore completely off, then pay as many as possible down below 50% debt-to-limit ratio.
5. If you have the green, pay them all off.
6. Pay all your cards off first, then close your most useless cards until you have four cards left. Make sure to keep your oldest card open.
I Paid My Cards Down Fifteen Minutes Ago and My Score Didn’t Change a Bit!
Slow down there, cowboy. Your credit cards probably only report your balances to the credit bureaus once every three months, so you might have to wait until the credit card companies run their next update.
Or, you can just call your credit cards and raise a little noise. Ask them to re-report your new account balance to the bureaus ASAP. The average credit card phone-agent-flunky will tell you they can’t do that. Ignore them. Talk to a supervisor or two and you’ll find someone who’ll get it done for you’all. have them fax you confirmation and thank them kindly.
The Secret for Improving Your Debt
Joint accounts & authorized user accounts act just like any other credit card account, so long as the credit card company reports it. If your spouse, good friend or trusting family member has a no-late-pay, zero balance, high-limit card that thy’re willing to add your name to as a joint or authorized user, then all that open balance & good credit history becomes yours too. You don’t even have to use the card…just make sure they pay on time, or those late notes will jump to your report, too.