Moderator Emeritus
fused
Posts: 16,374
Registered: ‎03-12-2007
Re: How Will Paying Off CC vs. Installment Loans Affect Score?
[ Edited ]


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.
 


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.


Message Edited by fused111 on 07-20-2007 08:17 AM
Credit Profile -
FICO 08 Scores (09-16-2014): EQ 824, EX 817, TU 822
All three scores were 850. Lost points for not having an open installment TL. So, BE WARNED!!!!!
Credit History: 26+ years ~ AAoA: 12 years ~ Util: 1% ~ Inqs: EX 1 (Amex 07-15-2014)