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You are behind on your credit card payments?

Submitted by on Wednesday, 14 October 2009View Comments
You are behind on your credit card payments?

You are behind on your faith card payments, but you want to know the best payment strategy for improving your FICO register.

Focus on paying the most you can on accounts that are the least late. The longer owed debt has been on your credit reports, the less effect it has on your FICO sum. So if you can make current an account that is past due by only 60 days, it last wishes as help your FICO score far more than paying off your evaluate on an account you have been past due on for three years. I want you to classify your credit card statements into two piles: cards that are late due for less than one year and those that are past due for more than one year. Start with the sooner pile: Pay off the account that is closest to being current first, then make a move to the next card in that pile. Once you have paid off the cards in the primary pile, I want you to use the strategy I covered in the Solution step above for paying off cards that you are more than one year behind on.

You thirst for to use your HELOC to pay off your credit card debt.

Do not do this. Flat if you still have enough equity to keep your HELOC unclosed, this is a dangerous mistake. You are putting your house at risk. When you take from your HELOC, your home is the collateral. Let’s say you get laid off in 2009 not accurately impossible, given the way the economy is struggling and suddenly you can’t keep up with the HELOC payments on top of all your other bills. Become lower behind on the payments and you could lose your house. As much as I yearn for you to pay off your credit card debt, you need to understand that faithfulness card debt is "unsecured" debt. There is no collateral that a ascription card company can easily force you to hand over to settle your answerable for. So it makes no sense to transfer your unsecured debt into a secured indebtedness a HELOC where you run the risk of losing your home if you can’t make the payments.

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