What’s In Your Wallet (It Makes a Difference) Part 2

Working on your credit scores so you can purchase a home? 

If you are not behind on payments, and you think you can manage the payments as they are (without closing accounts)… let’s talk about one of the most important things you can do to raise your credit score.

Take out your wallet… Look at the Credit Cards; and find the ones that have the name of a STORE on them (these are just examples):

Best Buy

Rooms To Go

Belks

Victoria Secret

Apple

Lowe’s

Sears

Pottery Barn

Radio Shack

Put those in one stack. Then take out the ones with the name of the BANK on them:

Chase

Bank of America

Wells Fargo

CitiGroup

Put those in a Stack. Then take all the rest of them out:

Discover

American Express

Capital One

Provident

American Airlines

And put those in a Stack. Now—if you REALLY have all of these credit cards, and they all have balances on them… you should have some really nice stuff! WOW! (ROFL!) But I digress…

So, when you have an extra $50, which ones do you pay down first?  Well, our suggestion is that you pay OFF the first stack as fast as possible. Not just down to 50% balance versus Credit Limit… these are the ones you really ought to cut up and close. Do NOT use STORE credit cards if you can help it! It’s not worth the discount to defer payments on Rooms To Go if you care about your Credit Score! Listen to Dave Ramsey and buy the furniture when you can afford to pay cash! 

With the other two stacks— work to get rid of the Capital One, Provident, “B” Tier cards as quickly as possible and cut that card up. You might not want to cancel the account, having the limit there is okay with a zero balance—but they are difficult to deal with and charge very Large Fees.

Once you have THOSE cards paid off, start working on the “Bank” credit cards. Pay each one down to at least a 50% balance. If you do this—you will have a GREAT credit scores!  That’s the GOAL!  Right?

 If you have questions about buying a home, or want specific information about your credit – please call Steve and Eleanor Thorne, First Financial Services!  919-659-5058