When Should I Sell Items To Improve My Credit Score?
Selling personal items to improve your credit will only help if this gives you more ability to pay down debt under the key 30 percent credit utilization immediately or to make your current and future payments on time.
You are losing significant points from your credit score for every credit card on which you maintain a balance over 30 percent, even if you pay this down every month.
This would be a good point to sell some things to pay down debt, as this category of credit utilization counts for 30 percent of your entire score. Getting your credit utilization to less than 10 percent will help improve your score even further.
Remember that the credit scoring models consider not just your average credit utilization score, but also on each individual revolving credit card account as well.
If you are having trouble making all of your credit card payments on time each month, this is costing you dearly in the 35 percent category of timely payment history. You could either pay off several of your balances with money from items sold or at least have money in the bank that you use only for paying your credit card bills.
Late payments reported on your credit report can damage your credit score by as much as from 90 to 110 points, so make it a point to always be on time (or at least not 30 days late, which is the point when most creditors start reporting late payments to the big thee bureaus).
How to Best Handle Debts and Loans
The best way to handle debt and loans is to always pay them on time and not let them grow to more than 30 percent of your available total credit. Not only does this help you with keeping the minimum payments manageable, but it also gives you the crucial points in the credit utilization category.
Your debt to income ratio also should be at 30 percent or less so that it does not become hard to service your debts and loans.
Obviously if you can afford it, the best thing that you can do for your credit score and financial health is to pay off your debt (and loans) in full every month. At the least you can attempt to make larger than minimum monthly payments every month.
Try making a double minimum payment every month to reduce your debt and loans significantly faster.
Remember to apply larger payments to debt with higher interest rates first, as this will reduce the total amount of interest that is assessed and applied to your accounts in the future substantially.
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