My first question...ready for your advice!

[zan987]

I am getting a small bonus at work this week and I am trying to decide which debt I should pay off that would have the greater impact to my credit score.

I owe roughly $2400 on my Citibank (sears) card @ 24.25 interest rate

The payoff on my car loan is $2425 @ 17.25 interest rate...I know that is very high but I needed a vehicle very badly.

I know you always hear that you should pay the higher interest first, but wasn't sure if that would be true in this scenario. 

Any advice would be  greatly appreciated!!

[pizzadude]

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@zan987 wrote:

I am getting a small bonus at work this week and I am trying to decide which debt I should pay off that would have the greater impact to my credit score.

@I owe roughly $2400 on my Citibank (sears) card @ 24.25 interest rate

@Anonymous payoff on my car loan is $2425 @ 17.25 interest rate...I know that is very high but I needed a vehicle very badly.

I know you always hear that you should pay the higher interest first, but wasn't sure if that would be true in this scenario. 

Any advice would be  greatly appreciated!!

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If you are looking to boost your FICO score, then pay down your credit card.   Installment debt %utilization is not a significant part of FICO scoring.

[pritchardhallhokie]

Although a little more info is needed to be 100% thorough, as long as you're not behind on either of the two accounts, pay the credit card down.  That CC is counting toward your overall utilization of revolving credit.  The car loan is a scheduled monthly payment, which has no bearing on an immediate change in score.

So if you take that bonus, apply it to your credit card balance, you will see an immediate increase in score.  Typically we've found 1% of utilization = ROUGHLY 1 point.  So if you pay 1000 in credit cards and that constitutes 30% of your overall CC balance, you may see a score increase of AROUND 30 points.  Trust me, pay CC first!!!!!!

[Anonymous]

I have always heard the same.  Pay off the bill with the highest interest rate. 

[pizzadude]

Also, once you pay down the credit card you might be able to use some of the payments that you would have sent to it towards your auto loan.  

And even though your interest rate is high, the balance is low so that is very good ~ hopefully you can get it paid down soon as well.

[FrugalRican]

Pay the credit card. The interest keeps compounding on whatever balance you have.

The interest on the loan is already fixed, it'll be the same whether you pay more or less, unless you paid it off in full (which seems to be what you want to do)... but still, if you pay off the credit card you don't have to worry about the extra interest from that.

Anything you used to pay on the credit card, use that to pay the car loan in addition to what you already pay on it.

[GoodCredBen]

Paying down the car loan will not help your score, paying it off will also not help your score....

Paying down the credit card will though. 

Your CC counts towards your util % which fico scores in. 

[zan987]

Thanks everyone for your quick responses!!    The concenus seems to be that I should pay my credit card off and that is what I will do tomorrow.   I have never been behind with either payment and I can not wait to see how much my credit score will go up next month.  Thank you ....thank you...and thank you again.

[GoodCredBen]

what was your util at with that card?

[GoodCredBen]

llecs has an AWESOME post about util,

Check it out!

 http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Score-impact-of-going-from-89-util-to-lt-...