(In A nut Shell) Lower rev-debt or larger down payment? Which is better for a loan?

[Anonymous]

I posted a thread, but maybe it is to complicated...

So an easy question to ask would be... (In regards to getting a <30000 land loan)

FICO: 708

If I have an extra 3,000.  Is it better to save this in an acct for a better down payment (5,000), or better to get a credit card that is at 81% usage down to 36%, but only having 2000 down?

Dont plan to seek this loan for 6 months...  which would be better at improving shots at getting this loan?

Thanks!

[blondy250]

IMO, pay down the card to zero, and then save for a downpayment..

[Anonymous]

I do not have this option....  As my goal is to be making land payments by the end of fall.

Lets make that 3,000 to 2,000.... (As I'm going to bring other 2 cards down to 30% with a 1,000 now)

So, I can go either road...

A.    Have 5,000 for a down payment on 30,000 land.  While having 2 cards at 30% and one at say 70%

or

B.  Have 3,000 for a down payment on 30,000 land.  While having 2 cards at 30% and one at say 40%

[guiness56]

What is your overall utilization right now? 

While the individual % you gave are both still kind of high,  the second one would be better for your score.

Remember, FICO has no memory.  So, while your utilization is high now, as soon as you start paying it down, your score will go up.

[Anonymous]

Thanks for the input!  Interesting on FICO's memory.

[Imua]

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@guiness56 wrote:

What is your overall utilization right now? 

While the individual % you gave are both still kind of high,  the second one would be better for your score.

Remember, FICO has no memory.  So, while your utilization is high now, as soon as you start paying it down, your score will go up.

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and, with a higher FICO score, presumably you would be offered better interest rate on the loan for the land. (iow, a higher FICO score isn't necessarily and end in and of itself, but a "tool" to use in being offered better interest rates)