Hi myFICO,
About a year ago I defaulted on a private student loan during a financial hardship and since then I have been working to improve my credit. Now I have the money to payoff the defualted loan, which is approximately $11k, but I also have some high-interest credit card debt. The interest on the defaulted loan is around 4%, which is of course much lower than the credit cards. I am wondering if I am better off using the money I've saved to payoff the defaulted loan to payoff my credit cards instead? I am not sure how each affects my credit score or if deafulted interest is higher but they both leave me with approxicamtely $200/month in payments and seemingly paying off the credit cards would save me on interest. Could any of you kind folks suggest the best way forward?
Thanks!
