Reply
New Visitor
Posts: 7
Registered: ‎01-27-2013
0

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

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!

Frequent Contributor
Posts: 465
Registered: ‎01-03-2013
0

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

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


MyFico 4/18/14
Experian-820, Equifax-834, Transunion (Discover)--850-- 7/6/14
Aaoa-9yrs, Oldest-14yrs
1 inquiry equifax 04 Chase mortgage
"Because your FICO® score is exceptionally high, there are no actionable negative factors present with your score".
New Visitor
Posts: 7
Registered: ‎01-27-2013
0

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

[ Edited ]

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%

 

 

Moderator
Posts: 22,406
Registered: ‎01-17-2008
0

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

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.

New Visitor
Posts: 7
Registered: ‎01-27-2013
0

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

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

 

 

Frequent Contributor
Posts: 292
Registered: ‎01-17-2009
0

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


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.


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)


BofA visa $9.4k ... BofA Cash Rewards visa sig $10k ... Cap 1 Venture1 visa sig $10k ...
Chase Freedom visa $10k ... Macy's $1.5k ... Macy's Amex $5k ... Sam's Club $6.3k
myFICOs as of 3/25/14:...EX=809 .... EQ=802....TU=787

Copyright ©2001-2015 Fair Isaac Corporation. All rights reserved.   | Terms of Use | Privacy Policy | Sitemap

IMPORTANT INFORMATION: All FICO® Score products made available on myFICO.com include a FICO® Score 8, along with additional FICO® Score versions based on Experian or Equifax data (additional FICO® Score versions based on TransUnion data are not currently available on myFICO.com). Your lender or insurer may use a different FICO® Score than the versions you receive from myFICO, or another type of credit score altogether. Learn more

FICO, myFICO, Score Watch, The score lenders use, and The Score That Matters are trademarks or registered trademarks of Fair Isaac Corporation. Equifax Credit Report is a trademark of Equifax, Inc. and its affiliated companies. Many factors affect your FICO Score and the interest rates you may receive. Fair Isaac is not a credit repair organization as defined under federal or state law, including the Credit Repair Organizations Act. Fair Isaac does not provide "credit repair" services or advice or assistance regarding "rebuilding" or "improving" your credit record, credit history or credit rating. FTC's website on credit.