topic Re: What to pay off first? in General Credit Topics

What to pay off first?

Anonymous — Mon, 18 Apr 2011 12:18:15 GMT

I currently have a about $72800 in tradelines. I am using about $10K of that on one card that has 0% interest until Oct 2011. All the other cards are at $0. I also have a $25K balance signature loan that I am paying also (8%). I will be in the market for a home purchase around the Sep time frame (5 months). My EQ fico score is 769. I have about $4K to pay each month towards my debt. So, in order to give my FICO score the best "BOOST ADVANTAGE" for a home purchase, which should I concentrate on paying down first? The Credit Card or the Sig Loan?

Thanks, all!

Re: What to pay off first?

Anonymous — Mon, 18 Apr 2011 15:32:18 GMT

Is the signautare loan reporting as revolving or installment?

If it is installment, I would pay down the CC because that counts toward your revolving utilization and an installment doesn't.

Re: What to pay off first?

Anonymous — Mon, 18 Apr 2011 16:30:53 GMT

It is an installment. So, when they run my credit for the house will they look at a payment of $200 bucks for a credit card versus a payment of $500 for an installament?

Re: What to pay off first?

Anonymous — Mon, 18 Apr 2011 16:37:04 GMT

They'll look at both. Along with debt to income ratio and other things.

Revolving utilization counts toward 30% of your score. By paying that down your score will go up.

Installment utilization has very little impact on your score.

Re: What to pay off first?

Walt_K — Mon, 18 Apr 2011 19:49:17 GMT

If your score is 769, do you need to worry about score boost? Score isn't everything so someone else can maybe chime in on how a mortgage lender will look at a 10K balance on a credit card going into a mortgage app, but if we're just talking about score, you already qualify for the best interest rates, no?

Re: What to pay off first?

tpatterson2k9 — Mon, 18 Apr 2011 20:16:52 GMT

My parents recently refinanced their home, but in order for them to do so the lender required that they use the refi money to pay off their CC, which was around a $10,000 balance. They have installment SLs that they cosign for my sister on and the lender virtually ignored these. With that said, it seems like it would be more beneficial to pay down the CC, but each lender is different.

Re: What to pay off first?

Anonymous — Wed, 20 Apr 2011 14:18:39 GMT

Thanks, all! Your input was very helpful!