I have a subscription to a credit monitoring service that I use to track my credit score on it's way to recovery. Well, in my down and out situation I decided to go online and look at it...nice thing is the score is definitely going in the right direction, just taking a while to get there. However, they have this cool feature that lets me play out "what-if" scenarios on my credit report.
So here's what I found out:
- Paying off all CC debt will raise my score by about 29 points.
- Making on-time payments for 3 months with add 6 pts; 6 months will add 23 pts; 1 year will add 38 pts; and 2 years will add 69 pts.
Since I want to improve my credit situation so I can potentially buy a house in the next 2-4 years I think I'm going to scale back on the savings and pay down my cc's faster. The sooner I can get my credit score up a bit, the better chances I have of obtaining better credit options. Plus, if I can establish a decent score sooner and hold onto it for a while, that will help even more.
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