topic Re: Santander payoff in Rebuilding Your Credit

Santander payoff

Anonymous — Mon, 09 Apr 2012 18:05:39 GMT

Hi All!

First, I have been on the board for about one year. The people here are great! I have improved my credit score from 550 to 660!

I just received a settlement and want some thoughts about paying off a Santander loan.

It is my oldest credit on my credit report 12/2005. A few late pays along the way but none in the past 12 months.

My questions is, if I pay it off (about $10K) - Will it hurt or help my credit score?

All of my revolving debt is in 2006 & 2007

My fin profile looks like this

Santander - $10K - Auto Installment

Cap One - $1K/$1K - Revolver (Paying off 4/30) - No late pays - 2008

Orchard - $500/$0 - Revolver ($0 Bal) - No late pays - 2007

First Pre - $200/$0 - Revolver ($0 Bal) - 5 late pays - 2006

Best Buy - $2000/$900 - Revolver ($900 Bal) - No late pays - 2012

I would like to get a mortgage in June so any thoughts would be great

Thanks!

Re: Santander payoff

pizzadude — Mon, 09 Apr 2012 18:13:57 GMT

If this is an installment loan that is still open, you likely won't see any real FICO gain from paying it off. FICO weighs revolving utilization much more significantly thatn installment utilization. I'd use your money to first pay down your credit card balances.

Re: Santander payoff

Anonymous — Mon, 09 Apr 2012 18:28:34 GMT

Thanks Pizza Dude!

I appreciate it!

Re: Santander payoff

Anonymous — Mon, 09 Apr 2012 19:44:36 GMT

I had a santander loan a while back so I know their interest rates are killer. What is your rate on that loan? If it's anything like my old car loan I would pay that off just to save money on the high nterest.

Re: Santander payoff

Anonymous — Tue, 10 Apr 2012 15:55:27 GMT

Thirsty, the rate is 18% and I will probably pay it off as well

My concern is will my credit age be reduced - I currently have 14 payments left on the Santander loan

Re: Santander payoff

pizzadude — Tue, 10 Apr 2012 15:58:31 GMT

@Anonymous wrote:
Thirsty, the rate is 18% and I will probably pay it off as well

My concern is will my credit age be reduced - I currently have 14 payments left on the Santander loan

Paying it off to get out from under that interest rate is a good idea. And don't worry about your AAoA, the account will still be factored into your age of accounts even when it is closed.