I don’t have the best credit in the world. One of my credit cards was closed about 8 months ago for over being over the limit, and I was told that if I made 6 continuous payments, and my balance was below the credit limit, that the card would be reactivated. So for the past 8 months, I was making double, even triple payments to have room on the card when it was reactivated. Silly to reactivate a card with $10 available credit, you know?
Today, I was told that that’s not how it works. That I would have to pay it off and I could then re-apply for a new one. Ok, that’s fine. I’ll pay it off. I don’t want another one. Maybe I can stay out of trouble without one.
Is it better to pay the remaining balance off as quickly as I can and be totally done with them, or should I continue to make maybe $5-10 more than the minimum due and build a string of on-time payments? What is better as far as rehabilitating credit?
In order to have even a chance at getting an intelligent and well-informed answer you’d need to post way more information than you have.
That being said, it is likely that immediate payoff versus gradual payoff on this one, particular, card will noyot make a difference whatsoever.
How far over the limit did the card go?
What was the limit on the card?
How long have you had the card?
How long did you have it before it went delinquent?
Do you have other cards, or have you had other cards that are now on your credit report?
Do you have installment loans on your credit report?
That’s just some of the stuff we’d need to know to answer intelligently, and even then, the scoring algorithms that Fair, Isaac, and Company utilize are complex and well-nigh incomprehensible.
Do you have any secured debt? (mortage, car payment)
Has this happened on other accounts? (the overlimit status)
Ever make a late payment?
Ever have a payment returned for non sufficient funds?
Banks monitor accounts for credit risk (will the account go delinquent?) and will close them accordingly.