Josh asks:

I am going to be coming in to a large amount of money and I should be able to pay off some of my mounting credit card bills, over $15K. Should I pay it off all at once or space out the payments over 3 or 6 months? I would like to buy a house in a year and want to get the biggest gold star on my credit report I can.

As long as you make enough income to keep those accounts current on a monthly basis, I would just pay off as many of them as you can in one big chunk.

There’s no particular credit score benefit I’m aware of to stretching out the payoffs, and there is a big psychological win in getting rid of that debt in one fell swoop.

Use this opportunity to change your charging habits so you don’t rack up the debt again. Don’t charge things if you can’t pay off your bill in full every month.

Lastly, Be sure to also set enough aside for a 3-6 month emergency fund if you don’t have one already.

(Photo: Strobist)

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