Passing down cards to decrease debt/availability ratio

[Failingupwards]

So...I'm going to be able to pay down my 2 largest cards (WF Visa and Target) this week. Will I get a big boost for bringing these down to 0 from ~$4000? I still have joint LOC with DH and a car loan that is almost paid off. Will I take a hit when the loan closes out?

[Anonymous]

Both questions you pose require more information before a real accurate answer can be given.

With respect to your credit cards, it depends on your total credit card balances, number of cards and total credit limits.  Paying down $4000 in CC debt if you have say $10,000 in total limits would be significant, where if you have say $100,000 in total limits it would be insignificant (to FICO scoring).  If you could list all of your credit cards with their current balances and limits that would be very helpful.

The answer to your second question requires us knowing if you are paying off your only installment loan.  If you have another one open on your credit reports, you won't see any score decrease.  If you are paying off your only installment loan, once it reports as closed and paid off you will see a 25-30 point score decrease, give or take.  There is an easy work-around for this to avoid losing those points though, if you don't have another open loan and would like to know about it.

[SouthJamaica]

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@Failingupwards wrote:
So...I'm going to be able to pay down my 2 largest cards (WF Visa and Target) this week. Will I get a big boost for bringing these down to 0 from ~$4000? I still have joint LOC with DH and a car loan that is almost paid off. Will I take a hit when the loan closes out?

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Yes you will get a boost from paying off the 2 credit cards but make sure you have one credit card reporting a small balance.

As to the loan, BBS correctly notes that if it's the only loan you have, paying it off completely will cost you some points in FICO 8. But in my view paying off the loan is more important than your FICO score.

[Anonymous]

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@SouthJamaica wrote:

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As to the loan, BBS correctly notes that if it's the only loan you have, paying it off completely will cost you some points in FICO 8. But in my view paying off the loan is more important than your FICO score.

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I agree that paying off debt is always > FICO score... but if score is also important to the OP, he should simply employ the SSL technique that so many have used to get the best of both worlds.