@Anonymous wrote:
Hello all, I am new here and am trying to rebuild my credit. Currently, my FICO is 583, which is awful...
I am inheriting a little money soon and decided to use it to start fixing credit. I have several old charge off debts, an auto loan, and alot of student loans.
I was going to pay off the entire auto loan ($16,000), but read that this could actually hurt my score? I have been current with it for 18 months now.
I am current on my student loans and current on a credit card (although its near maxed). My student loans are so high that they arent going anywhere soon...
What would help my credit the most? Pay off my auto loan and my credit card, or try to settle the old charge off debts? The charge off debts are 3-4 years old now, but I dont want to wait for them to drop if it would net me a big increase on my FICO.
I know that slow and steady wins the race, but I am looking to throw a decent sized chunk of $$$ if it will bring me a nice, quick, rise.
Thank you,
Matt
Welcome to the forums.
Paying off the car loan will not help your credit score and will actually lower it because the FICO scoring model likes to see a mix of credit and that includes installment loans. If you pay it completely off it will look like in your credit file that you don't have one and your score will lower.
Definitely either completely pay down your credit card to 0 or bring it down to utilization under 10%. High utilization is one of the bigger factors to hurt your credit score.
Dont pay off your old charge offs yet. If you pay them off, despite what many think, will not improve your credit score. Instead you should look into PFD letters. They are Pay for Delete letters where you offer to settle the debt for their promise to delete the file fom your credit report. There is tons of information about PFD letters in the sticky posts. Another good idea is to ask here about the specific charge offs and ask for suggestions on how to deal with them.
Good luck and take advantage of the cast knowledge that posters have to offer.
