Credit Card Center Advertiser Disclosure†
07-20-2007 07:52 AM
07-20-2007 08:41 AM
07-20-2007 10:29 AM
07-20-2007 11:17 AM - edited 07-20-2007 11:17 AM
As far as scores are concerned, pay down the CC first. 1-9% util of your total CL for max FICO points. Any money left over can be used to pay down the installment loan but don't expect much improvement with your scores, this is just a matter of paying less interest and saving money. Just remember high installment balances hardly affect your scores, what's important is paying on time whereas with CC's (and other revolving accounts) it's both, paying on time and keeping util low, again 1-9% util is ideal.
courthousedoc wrote:I've just found this forum and I think it's great. I'm going to have a good time this weekend trying to read everything.Hopefully some of the wise people may be able to answer a question. I've been slowing improving my score for over a year -- last year it was 588, now its 673. However, now I'm going to be coming into a bit of money and was wondering how to pay off debts to improve score. I've got one revolving account at 19% so that goes without doubt. However, I have an installment loan at 14.75% from my CU and a CC from the same CU at 11.9%, both with about the same balance. Should paying off one have a priority over paying off another as far as my score is concerned? Instead of paying off one, would it be better to split the money 50/50 to each? Also, if I do get even more money than anticipated, the next loans to payoff are all installments at about the same rates. Again, is paying down one account $1000 better than paying down two accounts by $500 each?Any help/thoughts/insights would be greatly appreciated.
07-21-2007 06:08 PM
07-21-2007 07:07 PM
The installment loan doesn't disappear beacuse it's PIF. After it's PIF, usually this type of TL's status will change and become closed and age on your reports for up to 10 years. Best if there is nothing derogatory reporting on this type of TL such as lates. Again closed and open TLs are weighted and scored equaly, doesn't matter if they are revolving or installment. I have never heard of an installment loan PIF early hurting anyones FICO scores.
RobertEG wrote:Agreeing with all that has been said, I also offer the fact that paying off an installment loan takes it out of your "type credit" category. Could cost 10-20 pts. With installment loans gone, you will take a hit in the 85 pt credit mix category, which will be much greater than eliminating the loan. If FICO gain is your goal, keep it in the mix. Pay off revolving accounts, and take advantage of the history of payments on the ACTIVE installment loan.
07-21-2007 07:09 PM
07-21-2007 07:42 PM
rbbyrbsn wrote:since installment loans don't figure into revolving Util moving CC debt would free up util.
Forums posts are not provided or commissioned by FICO. Forums posts have not been reviewed, approved or otherwise endorsed by FICO. It is not FICO's responsibility to ensure all posts and/or questions are answered.† Advertiser Disclosure: The listings that appear on myFICO are from companies from which myFICO receives compensation, which may impact how and where products appear on myFICO (including, for example, the order in which they appear). myFICO does not review or include all companies or all available products.
* For complete information, see the terms and conditions on the credit card issuer’s website. Once you click apply for this card, you will be directed to the issuer’s website where you may review the terms and conditions of the card before applying. While myFICO always strives to present the most accurate information, we show a summary to help you choose a product, not the full legal terms - and before applying you should understand the full terms of products as stated by the issuer itself.
IMPORTANT INFORMATION: All FICO® Score products made available on myFICO.com include a FICO® Score 8, along with additional FICO® Score versions. Your lender or insurer may use a different FICO® Score than the versions you receive from myFICO, or another type of credit score altogether. Learn more
FICO, myFICO, Score Watch, The score lenders use, and The Score That Matters are trademarks or registered trademarks of Fair Isaac Corporation. Equifax Credit Report is a trademark of Equifax, Inc. and its affiliated companies. Many factors affect your FICO Score and the interest rates you may receive. Fair Isaac is not a credit repair organization as defined under federal or state law, including the Credit Repair Organizations Act. Fair Isaac does not provide "credit repair" services or advice or assistance regarding "rebuilding" or "improving" your credit record, credit history or credit rating. FTC's website on credit.