Payoff debt before buying home
Date: Fri, 05/07/2010 - 23:18
We are planning to buy a house. However, both my husband and I carry several thousand dollars debt in credit cards. We are so far current on our cards, but considering to pay off some to increase our score further. However, I'm not sure if this would be a good idea since we are planning the big purchase.
Can an effort to pay off debt hurt our score instead of improving it?
Can an effort to pay off debt hurt our score instead of improving it?
An effort to pay off these debts in full never hurts your credit
An effort to pay off these debts in full never hurts your credit. If you are looking to pay these debts by increasing your payments or rather by paying it off in one lump sum, then it does not hurt your credit at all. But if you are looking to default on your debt for a few months and then settle them with your creditors, well then you might have to compromise on your credit.
You will not be eligible for a mortgage within 12 months of any
You will not be eligible for a mortgage within 12 months of any late payment at worst at best you will pay a higher rate and require more of downpayment to qualify. if you ae considering buying a home, pay your balances down to 30% of allowable credit and your score will go up.