@Anonymous wrote:
Quick question...
I recently totalled my vehicle and still owe $7000 on it, in the mean time I went out and paid cash for a new vehicle to avoid high interest rates. My question is, should I pay that loan off to lower my credit utilization? or should i continue to make the payments and increase my on time payments? There are some 30 day lates on there.
I'm currently about 30% utilization.
Thanks!
If you can save interest by paying it off then it may be worth it also do you have any other installment loans. Paying off your only installment would likely drop your score. Regardless of what was posted concerning installment loans and utilization FICO takes all trade lines into account for utilization in scoring. Installment loans are in a separate category from revolving accounts but their balance to original amount borrowed is factored into you scores but with less effect.
