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Contributor
Posts: 80
Registered: ‎02-27-2008
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better to pay off revolving debt or installment loans?

just some advice needed here; which would have the best impact on my credit score ... (1) pay 4k towards revolving credit card debt or (2) payoff finance company installment loans. i have 17k in card debt, and 4k in "finance company" installment loans. I can pay 4k towards this debt. where would this money have the best impact on my fico score?

Epic Contributor
Posts: 24,292
Registered: ‎10-23-2007
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Re: better to pay off revolving debt or installment loans?

Revolving debt.. pay as many to $0 that you can with the 4k

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Contributor
Posts: 80
Registered: ‎02-27-2008
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Re: better to pay off revolving debt or installment loans?

i was leaning towards the finance company installment loans since they have higher interest charges, and most lenders dont like to see finance company accounts. any other ideas? anyone?

Senior Contributor
Posts: 4,831
Registered: ‎04-20-2007
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Re: better to pay off revolving debt or installment loans?

Your choice. You will save money paying off the higher interest installment loans but it won't do anything for your score. Depending upon where you end up on your revolving utilization number of accounts with balances yada yada your score would improve by paying down credit card debt. Up to you.

Valued Contributor
Posts: 1,275
Registered: ‎09-22-2009
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Re: better to pay off revolving debt or installment loans?

In all honesty, forget about your score for now.  Pay down the accounts that are costing you the most money.  Money you don't have to pay out in interest is far more beneficial to you than a few FICO points.    

EQ FICO - EQ08 - 850 - 01/01/15
TU FICO - TU08 - 850 - 01/01/15
EX FICO - EX08 - 850 - 01/01/15
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EQ FICO - EQ04 - 818 - 01/01/15
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Super Contributor
Posts: 5,744
Registered: ‎01-28-2008
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Re: better to pay off revolving debt or installment loans?

Best to pay revolving debt in full monthly and pay down installment loans for higher FICO scores. 

Valued Contributor
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Registered: ‎02-18-2009
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Re: better to pay off revolving debt or installment loans?

what will free up the most money per month?

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Contributor
Posts: 80
Registered: ‎02-27-2008
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Re: better to pay off revolving debt or installment loans?

I have 23 active credit cards. 9 of them have been paid to a zero balance. total minimum payments add up to $685 a month spread out on the 14 revolving credit card accounts on which i currently have a balance. if i do the snowball thing where i start with the lowest balance and work my way up, i should be able to pay off 8 accounts before my $4k runs out leaving me with 6 accounts with a balance and min. payments of 491 a month.

 

plus, i have three installment "finance company accounts." the minimum payments on these three add up to $387. with the $4k, i can pay them all off.

 

my goal is maximum score increase !! so ... what should i do ....

Moderator Emerita
Posts: 3,091
Registered: ‎08-09-2008
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Re: better to pay off revolving debt or installment loans?


waqaszm1 wrote:

I have 23 active credit cards. 9 of them have been paid to a zero balance. total minimum payments add up to $685 a month spread out on the 14 revolving credit card accounts on which i currently have a balance. if i do the snowball thing where i start with the lowest balance and work my way up, i should be able to pay off 8 accounts before my $4k runs out leaving me with 6 accounts with a balance and min. payments of 491 a month.

 

plus, i have three installment "finance company accounts." the minimum payments on these three add up to $387. with the $4k, i can pay them all off.

 

my goal is maximum score increase !! so ... what should i do ....


I think that a reasonable answer to your question still hinges upon a few 'still unknowns'. So, you need a maximum score increase, but for what end, and how soon? What's your credit score now? I know you're probably going to grit your teeth at this request, but...uh... can you list our all 23 revolving accounts by issuer, credit lines, balance, and APRs? :smileysurprised: Here's an example (and why it matters, follows that):

 

 Credit CardLimitBalanceAPR
1First Mutual of Idaho500039510.99%
2Montana Mutual3500102523.99%
3Silly Bands Store100014.99%

 

Very generally speaking, paying down revolving debt would give you more bang for your score increasing buck than paying down installment debt. BUT, giving you opinions without knowing what it is that you need "maximum score increase" for, or what your timeline is may steer you in the wrong direction. Knowing more about who you're paying, and how much your individual and overall utilization will be reduced by, and how much $$$ might be freed up by paying what will help members give you more focused and realistic advice that might help you reach whatever goal you're pursuing. Moreso than very generic opinions based upon the general idea that, in FICO scoring, revolving debt weighs more heavily than installment debt. For example, someone might recommend that you pay two cards, and balance transfer two. Or, warn you that (in their experience) an issuer CLD'd or closed after a certain action (which might impact your utilization as well). There are too many variables, unknown, that could influence what people would recommend, so a little more info, could procure the advice that you're seeking.

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Contributor
Posts: 80
Registered: ‎02-27-2008
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Re: better to pay off revolving debt or installment loans?

@lilmirth and others: okay below is the list, and it follows the issuer / limit / bal / apr sequence.

 

01. Bofa Amex Accelerated Rewards: 7500 / 2675 / @ 5%

02. Discover More: 5500 / 2885 / @ 13.99 %

03. Capital One: 2500 / 1452 / @ 10.99 %

04. HSBC Platinum cashback: 2500 / 2106 / @ 18.99%

05. HSBC Platinum: 2000 / 156 / @ 18.99%

06. Barclays Apple: 3500 / 800 / @ 22.9%

07. Redstone FCU: 5600 / 400 / @ 7.99%

08. Amex Hhonors: 2500 / 800 / @ 13.99%

09. Redstone FCU: 3600 / 0 / @ 12.99%

10. USAA Mastercard: 7000 / 0 / @ 8.9%

11. Reeds: 2000 / 885 / @ 24.99%

12. Macys store card: 7900 / 2500 / @ 24.50%

13. Bloomingdales store card: 9000 / 2463 / @ 24.50%

14. Cfna Firestone: 3000 / 250 / @ 22.8% **** (this card i am paying off anyway since the 6 month promotion is almost up).

15. jcp store card: 1500 / 0

16. spiegel: 1300 / 0

17. kohls: 2000 / 600 / @ 21.90%

18. Victoria's secret: 1240 / 0

19. Walmart: 1000 / 0

20. Chevron: 840 / 360 / @ 26.99%

21. Zales: 2000 / 0

22. Macys joint store card: 4600 / 0

23. Express: 1700 / 0

 

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