they keep changing their tune...(LONG - sorry!) I agree with most of the latter posts - do NOT close out you CC's, it will bring down your FICO (or so I've heard/read last couple-3 yrs) Some people will say close out your acct's when paid off. (I'm sure this is meant for financially "out-of-control" spending) The thing is (from what I've read recently) is that the more "available" credit you have (vs debt), higher your credit score. AND, the older the "available" credit, the better. I really don't know how to explain this better right now, but let's say you have TOTAL DEBT of $200,000, (mortgage pymt is all you owe), and you have total "available" credit of $1,000,000. (Anyone feel free to correct me as needed - I'm tired!) SO, you now have a 20% debt/ratio. Any CC you close out = LESS "available" credit. LESS available credit = HIGHER debt/ratio. For example - let's say you have a CC with $200,000 Credit line available, and you close it out. NOW you have a 25% debt/ratio. ($1,000,000-$200,000=$800,000) You have ONLY a mortgage balance of $200,000. But NOW you only have $800,000 "available credit". This will bring your FICO score DOWN. I know it doesn't seem right nor "fair". But, that's how it works (as far as I know TODAY). Wish I had known about this a few short years back. I applied for a CC to do balance trf. They wanted to give me like $3000. I only "needed" like $1800. "THEY" decided to give me $2300! PLUS - some other CC's automatically RAISED my limit. I would call them and have them DROP my limit back down! Little did I know that I "maybe" hurt myself doing these things! Unless you are POSITIVE you no longer need a high FICO - (or, have medical or other situations that want you to MAX-OUT), I say KEEP them. Just use them once every month or two or three. I've used mine at grocery store for as little as $6 or $7.00 - just to keep active - and pay off when bill arrives. (And about that Sear's Card - what a joke! I had one from the 70's with a $260.00 cr limit - (which was dumb - you'd think after about 30 years they'd raise the cr limit!). I got a notice one day that they were "replacing it with a "Sear's M/C". OK... I got the thing and a $15,000 credit line! I laughed about it - NO WAY! TOO much credit line. A year later (b'cuz I never USED the card) - out of the blue I get notice my CC has been cancelled due to "non-activity"! No warning...) FINE! Whatever! ANYWAY - I believe if your total MAXIMUM debt/ratio is 20% or LOWER, you are in really GREAT shape (as long as you have no recent late pays, etc.). I have recently heard the mortgage lenders are laxing off somewhat on loans (used to be about 30% ttl debt/ratio?) - but don't know for sure, as I have no reason to contact them for anything!

Hi Robyn, Can you explain further what you mean by this statment? "As you are discovering,..." yadda yadda from me... I misread the explanation, apologies. You are in strong shape, *AND* thinking quite sharply about your equity management. Is it your opinion that using the equity in our home is a dumb idea and to only do it if we are unable to pay the other debt on time? Quite to the contrary! Retaining your net worth overwhelmingly in your primary residence is neither safe, nor growth oriented. If you are still building your tax-preferential retirement strategies, you most certainly would be wise to shift your equity from your real estate to other safer, more growth oriented methods. I am confused, because for some reason I feel like we would be better off financially if our cc and student loan debt was gone and we just had a mortage payment. What am I not understanding? A) You were accurately confused because I misread... my apologies, B) Your student loans *MIGHT NOT* be "bad debt"... they are sometimes tax advantaged, and may have very low interest rates (or may be consolidated/refinanced to very low student loan consolidated rates.) C) Credit card debt... yes, eliminate that... but leave the lines on the cards open, empty & alone. Also, how does one go about finding a well-sources mortgage broker? Well... I do be one ;~) But aside from me, you can do a web search, seek out referrals from friends, family, co-workers &/or real estate agents. What *I* would strongly recommend, in ANY case... is to seek a Financial Planner who happens to have a lending license... rather than a vanilla Mortgage Broker. In your case (and frankly, in most people's cases) the lowest rate in the wrongly structured overall financial picture can be far more costly than the properly designed & implemented plan overall... even if it comes at the cost of a premium planner. Sending you all the best! Dave Donhoff Leverage Planner

sharon-sd - a very easy solution for your DD and SIL is for her to make her credit card joint with her DH (or any other forms of credit she has). I was in a similar situation, except I had no credit history here. I'm from CAnada, had a great rating there, but the US does not look at foreign credit history, even from the wonderful neighbour to the north. I couldn't so much as get a dept store credit card with no history here and I had to have my husband make a bank account joint for me to be able to open a bank account after we were married. Watching Suze Orman, she said to make the credit cards joint and that's what we did. We have three higher limit cards, all with zero balances. If it has a balance, we pay it off monthly. sometimes, if we had a large purchase we pay it off over two months so it doesn't hurt our savings. At any rate, I just checked my credit score. Mine is 769 and dh's is 797. All his history was transferred to my credit rating at the three major agencies. Also, a friend told me when I applied for a low limit mastercard from USAA (where my dh has belonged for eons), they asked me about my income. At the time I didn't have any and they declined me on the spot. Didn't even take an app. My friend who worked in banking told me that since AZ is a community property state, that dh's income is MY income too and I could have used his income to qualify for my own credit card. If your DD and SIL are in a community property state, then HIS income is qualified as HERs and she should be able to gain credit with his income and her credit rating. At any rate, I have established a very good credit rating that some people take decades to get. This happened in a matter of months. The secret is for the one with the credit history to make them joint (not just as an authorized user on the account). The drawback, joint means both are on the hook, but it's important for your SIL to have credit history too to qualify for lower interest rates in case they want another mortgage.

Abbey First congrats on getting your credit paid off and in control. As for your friend she needs to RUN not walk away from these people. there is no "secret credit card program" This is one of the dreaded "settlement" companies I have spoken of in a previous post. this is how they work: they tell you to stop paying your credit card bills and send them a certian amount of money each month. When your "account" with these folks hits a certian ammount(less the money they have taken for their "fees") they will then go to the creditors and offer them 50% of the balance to settle. If you friend is not late the chances of this happening is very very slim. What they don't tell you is credit card companies look upon these companies as a industry "joke" also what they don't mention is not paying your bills will result in late fees and negitive reports on her credit report. They also can't promise that the credit card companies won't "sue" her. When I worked for a major credit card company and we would receive these "settlement companies" letters we immeditally would send the account to the litigation dept for review. If there were any assets like a home or accounts that were being paid we would proceed to get a judgement against the debtor. Another thing they don't mention is any settlement over $599, is reported to the IRS so for example: Balance $10,000 settlement $5000. the $5000 that wasn't paid is reported to the IRS and your friend would have to report this as income there by raising her taxes. finally should your friend decide that the collection calls and possible litigation is not worth it, the damage she has done to her credit report will remain for 7 to 10 years allot longer than going the CCC route. there are no "magic" quick fixes to getting out of debt other than a good repayment plan. You are the best example how well ccc can work that is where she should be going Karla p.s. sorry for any typos but it is 5:30 in the morning lol