I highly recommend you use a site like Credit Karma to track your score and see the impact of your $10,000 balance. No answer here discussed the nature of a credit score, its composition, and what you can do to improve it. Your score is being impacted by utilization. This is simply the amount owed vs your total credit line.
When I recently applied to renew my HELOC, I saw my utilization was high for the fact that I run most of my budget thru my credit cards. For the next few months, I paid the bill in full, and then some, before the balances were reported. An 850 credit score got me the loan with a 10 minute phone call and copies of my 401(k) and IRA statements. Gaming the system took me from a respectable 790 to the maximum score. In your case, paying the $10K off will put you well over 700.
Note, my credit report still shows accounts I closed in late 2008. If you really wish to go off the grid, there’s a decade delay.
If you are really planning to do this, I suggest you try a few things first -
- rent a car without using the card
- reserve a hotel room without the credit card
- ask your bank what they will do for you if you buy something with your debit card and find the business closed before they shipped your item.
People can, and do, mess up with their cards. I am certain that if a card user starts with one rule, “do not charge any item that you don’t have the cash to pay in full the day the charge hits” that they will fall into the group of responsible card users who use it to their advantage. No different than the cook who knows how to use a cooking knife vs those who slice into their hand while cutting a bagel.
The celebrity and entertainer Dave Ramsey has a view that cards have no responsible use. Clearly, our opinions differ.
Your comment response "buying within 5 years with 20% down," reinforces my opinion that your best path is to simply continue with your plan. Paying the card aggressively will let you be done with it well before you apply for the mortgage.