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Valued Contributor
Boswd
Posts: 1,065
Registered: ‎04-26-2007
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Re: Rapid Repayment of Installments...



rifleman wrote:
With me it's a question of cash flow--I can afford to send most of my income to student loans right now and still live a relatively comfortable life, but I'm not sure I'm doing the right thing. I wonder if it's better for me to save money for a downpayment on a house rather then pay down relatively low-interest student debt faster I am constantly confused by this
 
It depends on how much the loan is for.  And how long it would take you to pay it off.  Have you done the math?
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masdeocho
Posts: 2,050
Registered: ‎04-17-2007
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Re: Rapid Repayment of Installments...



FICO_Focused wrote:
The reason I ask is that I was recently turned down for a couple of CCs... One of the common reasons was that the amount owed on Installment account is to high.
 

Could be because you're only 3 months into a 5-year loan.
-----------------
Bartender, bring another round of FICOtinis please!

9.4.2011: TU 805. EQ 815.
Moderator Emeritus
fused
Posts: 16,373
Registered: ‎03-12-2007
0

Re: Rapid Repayment of Installments...



masdeocho wrote:
Don't get confused -- there is no single "right" answer.  Some people are debt-adverse, and want to pay off as much debt as fast as possible.  Others believe in having an emergency fund despite having debt.  Still others believe in saving for a goal above all else  And some like to do a combination of paying down debt/saving.  The best approach for you is ... well, the best approach for you. 


I agree.  But the OP wanted to know how his FICO scores might change.:smileyhappy:
Credit Profile -
FICO 08 Scores (11-08-2014): EQ 818, EX 817, TU 822
All three scores were 850. Lost points for not having an open installment TL. So, BE WARNED!!!!!
Credit History: 26+ years ~ AAoA: 12 years ~ Util: 1% ~ Inqs: EX 1

Established Contributor
FICO_Focused
Posts: 905
Registered: ‎05-09-2007
0

Re: Rapid Repayment of Installments...



masdeocho wrote:
 
Could be because you're only 3 months into a 5-year loan.

That's what I was thinking, but I wonder why the canned reason is in regard to ballance rather than time?
 
Rob
Moderator Emeritus
masdeocho
Posts: 2,050
Registered: ‎04-17-2007
0

Re: Rapid Repayment of Installments...



fused111 wrote:


masdeocho wrote:
Don't get confused -- there is no single "right" answer.  Some people are debt-adverse, and want to pay off as much debt as fast as possible.  Others believe in having an emergency fund despite having debt.  Still others believe in saving for a goal above all else  And some like to do a combination of paying down debt/saving.  The best approach for you is ... well, the best approach for you. 


I agree.  But the OP wanted to know how his FICO scores might change.:smileyhappy:


Sorry, I should have quoted -- I was answering rifleman who said he was constantly confused.
 
FICO, schmiko -- who cares about that? :smileyhappy:
-----------------
Bartender, bring another round of FICOtinis please!

9.4.2011: TU 805. EQ 815.
Established Contributor
FICO_Focused
Posts: 905
Registered: ‎05-09-2007
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Re: Rapid Repayment of Installments...

Moderator Emeritus
masdeocho
Posts: 2,050
Registered: ‎04-17-2007
0

Re: Rapid Repayment of Installments...



FICO_Focused wrote:


masdeocho wrote:
 
Could be because you're only 3 months into a 5-year loan.

That's what I was thinking, but I wonder why the canned reason is in regard to ballance rather than time?
 
Rob


*using quotes now so as not to be taken out of context*
 
Perhaps it's like the inverse of utilization.  You've only paid a small percentage of the total amount you owe, regardless of the time allowed for paying it back.
-----------------
Bartender, bring another round of FICOtinis please!

9.4.2011: TU 805. EQ 815.
Established Contributor
rifleman
Posts: 565
Registered: ‎06-11-2007
0

Re: Rapid Repayment of Installments...

no I have not done the math, but with a sub-650 fico score I'm not likely to get a good mortgage interest rate--my first focus is on increasing the FICO score as much as possible--that never seems to be a bad idea.

It would seem that rapid repayment will have little impact on anyone's Fico score--payment history is more important.

My interest rate is 8.12% on a total balance of $23,970--all student debt.

I guess another goal would be to start building equity in a home as soon as I can, as I don't own a home right now, so I'm not sure I want to spend 2 years frantically paying off student debt while not building any equity in a home.
Senior Contributor
ilovepizza
Posts: 3,071
Registered: ‎05-17-2007
0

Re: Rapid Repayment of Installments...



fused111 wrote:


ilovepizza wrote:
I completely recommend paying it off early if you can because:
1. Less interest to pay!
2. Looks better to lenders for income reasons.
3. You still get points for the loan being paid.
4. The debt is counting against you on your score.

If you choose to not pay off early.
1. More history.
2. Lenders see you as more profitable.

IMO pay off as fast as you can unless you have 0% int.
There are other ways of making history that will cost you less $$.

1. Yes
2. probably not
3. hardly
4. NO!
1. Yes, if payment are on time
2. Ask Tuscani:smileywink:





I wonder... If credit actions are scored differently for my CR than others? Maybe we all are scored differently?

Score Watch not only gave me points for closing my loan (of which was early), they outlined $0 balance as the factor! I paid it off early. Probably had I waited till the end I may have gotten more points, but I still got plenty!

This is why I am starting to believe people might be scored differently. Other people have done things that for me raised my score while they have a score drop for a similar action. This has happened too many times to be conflict of opinion.

Please post if this is possible with FICO. Thank you.
If we never set higher goals we would never get as far.
sol, credit 101, acr, abbreviations, calc
Senior Contributor
ilovepizza
Posts: 3,071
Registered: ‎05-17-2007
0

Re: Rapid Repayment of Installments...



fused111 wrote:
4. NO!



I did not know that. I always thought Auto installment debt counted lighter but still negatively to your score. Is it only Auto debt or all installments debt is ignored? :smileyhappy:
If we never set higher goals we would never get as far.
sol, credit 101, acr, abbreviations, calc

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