Current strategy need advice

[Anonymous]

Hey everyone

I've been working on my credit for quite a bit of time. I have lexington law removing some delinquint accounts from my report and theyve done a great job so far (only 2 left out of like 8 when i started). I've been working on my credit for about a year now. I currently have 5 credit cards and a line of credit with an online store. All the credit cards are low lines, with high apr of course. The good thing is i've gotten almost all the bad marks on my credit gone and my credit score has gone up 200 points since i started. Although i'm not doing as good of a job with my debt to credit ratio (hope to get back on track in november), i've never missed a payment or anything like that.

The only debt i have is with the cards and online line of credit... which i have capital one, first premier, first national, bank of america, credit one and finger hut as the line of credit.

Now i've just recently entered the next stage of building my credit with installment loans. I know i'm getting bent over on the APR, which is why i'm trying to get these resolved as fast as possible. Each one of these has 20+ APR... which is VERY scary. One is an Auto loan for $25k. The other is with Conn's that is around $5k... naturally the 20%  APR isn't so bad in the long term with that one but i want to pay both of these quickly. I'm currently tapped with my finances but i'm about to take on a side project at work that will essentially double my income and could pretty much let me pay off the car and this Conn's installment loan within a few months. 

The question i have is... i want to take advantage of having these installment loans and really maximize my credit gain - but also don't pay any unecessary interest. How long would you guys recommend I pay installments? With an installment loan, does it matter that i pay payments? I know with credit cards the 30% credit to debt ratio every month is where you get your big bang...  is there something similar with installment loans or does the fact you just pay off the installment loan mean you've done the best you can?  

I'm ok with holding off and paying these installment loans for a while if it builds my credit... but i'd certainly like to get them out of the way ASAP so i don't get hit with that ridiuclous APR too bad.

any advice would be appreciated...

thanks!

[myjourney]

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@Anonymous wrote:

Hey everyone

I've been working on my credit for quite a bit of time. I have lexington law removing some delinquint accounts from my report and theyve done a great job so far (only 2 left out of like 8 when i started). I've been working on my credit for about a year now. I currently have 5 credit cards and a line of credit with an online store. All the credit cards are low lines, with high apr of course. The good thing is i've gotten almost all the bad marks on my credit gone and my credit score has gone up 200 points since i started. Although i'm not doing as good of a job with my debt to credit ratio (hope to get back on track in november), i've never missed a payment or anything like that.

The only debt i have is with the cards and online line of credit... which i have capital one, first premier, first national, bank of america, credit one and finger hut as the line of credit.

Now i've just recently entered the next stage of building my credit with installment loans. I know i'm getting bent over on the APR, which is why i'm trying to get these resolved as fast as possible. Each one of these has 20+ APR... which is VERY scary. One is an Auto loan for $25k. The other is with Conn's that is around $5k... naturally the 20%  APR isn't so bad in the long term with that one but i want to pay both of these quickly. I'm currently tapped with my finances but i'm about to take on a side project at work that will essentially double my income and could pretty much let me pay off the car and this Conn's installment loan within a few months. 

The question i have is... i want to take advantage of having these installment loans and really maximize my credit gain - but also don't pay any unecessary interest. How long would you guys recommend I pay installments? With an installment loan, does it matter that i pay payments? I know with credit cards the 30% credit to debt ratio every month is where you get your big bang...  is there something similar with installment loans or does the fact you just pay off the installment loan mean you've done the best you can?  

I'm ok with holding off and paying these installment loans for a while if it builds my credit... but i'd certainly like to get them out of the way ASAP so i don't get hit with that ridiuclous APR too bad.

any advice would be appreciated...

thanks!

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Welcome to the forum

I think you answered your own question....Bravo

Short answer and sorry for the delayed response 

If it saves you money $$$$$$$$$$$$ then don't worry about any scores, credit mix or anything else for that matter.

Money in the bank will help payoff any other outstanding debts you have and make you debt free faster and in the long run isn't that a better financial picture

[Anonymous]

There's two schools of thought on this. One is that lenders really want to see regular monthly payments being made more than they want to see stuff being paid off. The other is that its best to keep the total debt low or be debt free.

I think it really depends on what your immediate, short term, and long term goals are. If your scores have gone up signifigantly since your auto loan, you may benefit from refinancing it through another lender. I refi'd my first car loan, and got about 4 percent better interest and dropped my payments about $30.

I would also consider trying to get you limits raised on your oldest cards while dropping the newer ones I think its usually best to keep it to three cards or less with revolving credit and keep the total utilization below 10%

Norm

[Anonymous]

hey guys thanks for the responses

i'm not sure if it would work this way, but lets say the installment loan is $10,000 over 36 Months. If i paid $8,000 right out and said i want it applied to the principle, would they adjust the remaining balance to be spread out over the remaining months? or would my minimum monthly payment stay the same? 

[Anonymous]

If you pay down principle it just means you pay it off sooner. Your payments will stay the same. Depending on the lender, they may limit the amount of principle that can be paid without making a full payoff. My last car loan, for example, through Wells Fargo Dealer Services, limited payments to three times the monthly amount or full payoff, nothing in between.
If you want to lower the payments you'll have to refinance it.

[Anonymous]

they really wanna take me over on that APR looks like i'll have to grunt it for a while so i can refinance it, i'll at least lower it out as much as possible. With the payment plan and my terrible APR, i'd pay double the price of the car by the time i was done with minimum payments....

[Anonymous]

Who is the car loan through and how old is it? the loan, that is, not the car.

[Anonymous]

Capital One

I just got it last week, so i'm just trying to plan for the months coming ahead.

I only put $640 down on a  $25000 loan so i mean... it makes sense lol!

[Anonymous]

I'd continue to do the cleaning, and look at a refi in 6 months to a year, depending on how much your score goes up.