Decisions....decisions.....

[calliou]

Should I pay off my jeep that is a bit over $7000? The interest rate is 14%, and it wouldn't really make a difference to pay it off, but I've been told to lower my debt to boost my score. I just reached 640, and don't want to go down again.

Would it help boost my score by paying that off, or would it just be better to keep making payments on it?

[Anonymous]

It may actually hurt the score to pay it off if you have no other loans. 14 percent is rough, though. Dollar wise paying it off may be in your best interest (assuming you can't refi it into something better) but not having a loan may hurt your score.

[ezdriver]

I recommend that you pay it off and get yourself a new credit card or a secured-installment loan for $1,000 which you will pay off in 12 months. These two things will mitigate your score drop, save you money and mitigate your score drop in less than 12 months time.

Why are you concerned about your current credit score? Are you about to buy a home?

[calliou]

I do have other payments, as I have student loans that are current, and credit cards with utilization below 30%.

As for buying a house, yes. I am currently buying a house "land contract" from my fiances sister, but want it in my name as soon as possible. No, she wouldn't pull it out from under us, I just want to better my score.

Thanks! 

[DaveInAZ]

---

@calliou wrote:

Should I pay off my jeep that is a bit over $7000? The interest rate is 14%, and it wouldn't really make a difference to pay it off, but I've been told to lower my debt to boost my score. I just reached 640, and don't want to go down again.

Would it help boost my score by paying that off, or would it just be better to keep making payments on it?

---

Paying down your CC debt will do more to boost your score. You should let only 1 CC report with a no more than 9% of credit limit, and the other cards with $0 balance.

Have you considered refinancing the Jeep? If you have a year+ of perfect payments you should be able to refi at 4-6% with Capital One or better yet a local credit union. Or an alternitive to refi is to pay around $5k extra payment on it - that way most of your payment is going toward principle instead of interest, you'll have it paid off in a year or so, and the low loan balance to oiriginal loan amount will do more to help your score than no car loan at all.

[gdale6]

---

@calliou wrote:

I do have other payments, as I have student loans that are current, and credit cards with utilization below 30%.

As for buying a house, yes. I am currently buying a house "land contract" from my fiances sister, but want it in my name as soon as possible. No, she wouldn't pull it out from under us, I just want to better my score.

Thanks! 

---

Only 1 installment loan needs to be open to help boost score in that area you would not need a secured or non secured instalment rebuilder

[StartingOver10]

---

@calliou wrote:

Should I pay off my jeep that is a bit over $7000? The interest rate is 14%, and it wouldn't really make a difference to pay it off, but I've been told to lower my debt to boost my score. I just reached 640, and don't want to go down again.

Would it help boost my score by paying that off, or would it just be better to keep making payments on it?

---

Pay off that vehicle loan. Rate is much too high and you have other installment loans (student loans) so you won't need to pick up a credit builder loan.

The others are right about boosting your score by paying off your revolving debt except for one cc card balance of less than 10% of the credit limit.

IMO keeping a high interest installment loan for the sake of FICO scoring doesn't make financial sense. Watch your dollars - high interest loans are not in your best interest (pun intended).