Will I approve for a new auto loan?

[Anonymous]

You should definitely wait if you can and pay down the cards with high balances. I can tell you from experience that this will make a world of difference in your score and therefore your interest rate. I was in the same situation a year ago and I applied for an auto loan with high utilization on my cards. I got a rate of 20%+. Over the course of a year I paid my cards down and now I have a rate of 5.19%.

[Anonymous]

Thank you everyone for all these wonderful answers and advice!!!

let's just say i have $4000 dollars.

Would it make a difference which one i pay off first? Credit card or the loan? How does the creditor see this?

[HoldingOntoHope]

Paying down or paying off the credit cards will be the best. FICO scores installment loans as a much smaller part of the equation and paying it down or off will have little impact on scoring. Just pay the installment payments on time. If you have extra money you could add it to the installment payment just to reduce your overall outlay on interest.

And don't forget to hold something back as the auto dealer will probably require a down payment. The more down payment available for the car will help overcome other credit weaknesses.