What to pay off next??

[UtahTiger]

QUESTION: 

Should I pay off my 1 maxed out credit card for 9.9K on a 10K limit first our should I focus on paying off my 28K tax lien from the IRS if I want my score to the highest.? 

History and current score. 

My Fico is 650 and I just paid off my car last month and also paid this past week of $36,000 in credit card debt...I paid off 7 credit cards 4 of which where maxed out..  So now I only have two debts listed above other than my home.  I had a foreclosure almost 2 years ago.  The foreclosure is the only late payment I have had in over 10 years. This past week I just signed on as an authorized user on another card  with a 20K limit and a 20 year old history. 

Thank you, 

Utah

[llecs]

If you paid the lien to $0, FICO wouldn't change. If you paid the CC to $0, you stand to see a FICO improvement if overall util was improved for doing so. Score aside, there are other considerations like future IRS action, whether or not the $9.9k CC is closed, interest and fees paid, etc. Congrats on the paydown thus far. WTG!

[UtahTiger]

No action from the IRS.  I am just paying it off $350 a Month.  The credit card I have is 10K limit and I owe 9.9K.  It is open and I have never missed a payment on it.  

I heard that Lien will stay on my record 7 years so if I pay it off it will not up my credit score it seems but like you said if I pay of my credit card then since I will have zero credit card debt with 81,000 available it should go up.  

My goal is to get my score over 725 so I can refinance my house. My mortgage on my rental house is at 6.78% and I am going in the whole every month by $600. 

[jamie123]

You will see a huge bump in your score if you pay down the credit card.

You still want to have one credit card report a small balance every month for the best score.

Your highest score will be acheived by having 1 CC report a balance from 1% to 9% of its credit line withh all your other cards reporting zero. If you pay them all to zero your scores will actually drop a few points.

[boomhower]

Paying off the credit card will give the bigger score bump.  That said, the chances of you getting a refinance with an unpaid lien aren't good.  But neither are they with a maxed $10k CC.  Your going to have to pay the lien and pay down the card befire a refi is going to happen.

[kroberts67]

UTIL make a much, much, much bigger difference than the lien in score bump according to threads and according to my score simulator.  

Did you know that if you're set up on direct debit you can make a withdrawal request to the IRS?  I'm on an installment plan (my emp[loyer deducts and send it in for me) and have made 6 pmts already but sent in the request anyway.  i just mailed it the other day so I'm waiting to see if this will work or if they tell me I must be on Direct Debit.  It's form 12277.  If you're on DD, or if you can set that up, check it out!

[kroberts67]

I should say I don't know if there is a min or max to do this with the IRS but it's worth looking into.

[pakman92]

---

@boomhower wrote:

Paying off the credit card will give the bigger score bump.  That said, the chances of you getting a refinance with an unpaid lien aren't good.  But neither are they with a maxed $10k CC.  Your going to have to pay the lien and pay down the card befire a refi is going to happen.

---

+1