What is more detrimental to credit scoring ?
Like many, my college years proved brutal to my credit rating but I'm
finally able to make a concerted effort at rebuilding it.
What is more detrimental to credit scoring, a credit card account that
has been suspended (with consistent payments since), or an active
account with a balance close to the limit? I have been aggressively
paying down the suspended account, and am wondering whether it would
be best to go ahead and pay off the remaining balance of approx. $600
in one fell swoop, or continue with smaller payments and instead make
a large payment on the active account, so that my balance vs. limit is
more favorable. I am currently carrying about $2700 on a $3000 limit.
Also, the creditor for the suspended account (MBNA) has indicated that
it can be reactivated, though the interest rate would be an insane
27%. Would it be best to leave it suspended, or request reactivation?
In either case I have no desire to use credit cards much anymore, but
I would like to work towards improving my score for future auto or
home loans.
The latter. Since the suspended one is being paid off (you can't add to
the balance) the one with the high balance (meaning more than 50% of
your credit) is more detrimental to your credit score .
YOu need at least one revolving credit line to show that you are, in
good faith, paying on time for your bills, but the balance must not be
more than 30%