A couple of queries re: repayments and credit rating

ChrisFilter

Hi Everyone,

New here, so apologies if it was easier to find a similar thread than I found it!

My parents are helping me out with a loan, as despite a great payment history, I've had 4 addresses in 3 years and I can get no credit.

The loan is consolidation for lots of other debts.

I'm going to pay off all of my credit cards, however I was wondering how best to do this. Which of the below is better for my ongoing payments history?

Pay them all off, then close accounts.
Pay them all off, but keep 1 of the 4 accounts open.
Pay them all off, leave all accounts open.
Pay them all off apart from £50 on one, and make minimum payments. Close other accounts.

Also, I'll give them a call anyway, but does anyone know if I can make a part-lump sum repayment on my loan with citifinancial? Will it reduce my monthly repayments, or just the amount of time it takes to pay it back?

Thanks!

Chris

GirlRacer_2

Anyone able to help here?

sammy115

I am in no way an expert, BUT I think what your decision depends on what kind of person you are. Obviously you spend too much otherwise you would not have ended up in debt. Be careful that you don't pay your debt off with another loan and then end up spending on your cards again and end up with your credit cards up to the max and an additional loan.

The majority of people on this board will advise against getting another loan to pay off your debts and would suggest you reduce your spending and pay extra off your CC's via the snowball route.

If you must go down this route then I suggest the following- to help your credit rating (although unless you are going for a mortgage why would you want to) I would pay off ALL your cards. CLose all but one of your cards and then buy petrol or something each month on this one card BUT PAY IT ALL OFF EACH AND EVERY MONTH!!

If you can do this then well done (its probably more than I can do).

As to the loan, it depends on the type of loan but I would imagine it would just reduce the amount of time you have to pay on the loan rather than how much you have to pay in total. I would ask.

Unless you have your spending under control, consolidation is not a good option. Why don't you post an SOA and see if someone can see an alternative option.

Snaggles

I agree, keep one open but repay it each month in full. If you know you wont repay it in full, and will be tempted to run it up again, I would close them all.

postingalwaysposting

another one that agrees, keep one and only one open and lower the limit to an amount that you can pay off each time you get payed, then you have the time to build your rating back up without ending up back in debt but dont be tempted to up the limit as this where the spiral will begin again, consolidation only works if you take away the credit cards its paying off and for most people they forget/dont to do this and end up in more debt, please dont be one of those satistics