Auto loan VS Credit card

[Anonymous]

I need some guidance in to what would help my fico score the most. I have an auto loan at 6.49% with a balance of $4800.00 and a credit card at 3.25% (prime + 0 fixed) with a balance of $3500.00. The credit card is closed with this balance. I will have enough funds to pay off one of these bills. Should I pay off the auto loan or the credit card? I have no other open c/cs and no other loans. What would help my score the most?

[Creditaddict]

for optimal fico, pay the credit card off, but if you don't need to buy a house or anything real soon, pay the auto loan off and save the money

Message Edited by Creditaddict on 01-28-2010 01:37 PM

[Anonymous]

In your case, I wouldn't worry about FICO right now.

I would pay off the car which is higher APR.  Then take the normal monthly payments you are currently making on the car and add them to the credit card.  You will save the most in interest, be debt free sooner, and will not lose any end result FICO improvements.

Don't worry about FICO now, look at what FICO will say in 6-12 months when you are debt free, FICO healthy and credit suave!

IMO 

[Uborrow-Upay]

What's the reported credit limit on this closed credit card?  And what's the original loan amount on the car loan?

[Anonymous]

The credit card limit was $5,000 and has a balance right now of $3,516.71. The original loan amount for the auto loan was $10,304.83 and has a current balance of $4608.71, I just made a payment.

[Anonymous]

My credit report shows the limit as the balance owed on the credit card.

[Uborrow-Upay]

Thanks for the added info, jav32204!

I agree with both Creditaddict and txjohn, above.

Don't worry about the FICO score now. Save some money on interest payments by paying off the car, then tackle the credit card balance with the additional money you'll no longer be paying towards the car every month.

Good luck, and keep us updated, OK?  Debt-free is a nice place to be!

[Anonymous]

Good advice. The reason I'm concerned about the fico score is because I'm going to be buying a house with the next 12-18 mnths and want to get the best rate i can. So for now I'm just trying to boost my score between now and then. Last I checked my TU was a 629. That was about 8 months ago. I forgot to mention this in my original post, sorry.

[Anonymous]

I forgot to mention this in my original post, sorry. I have since paid off a loan, a credit card ( it is closed), an unsecured personal loan and another auto loan.

[Uborrow-Upay]

jav32204, are you the one closing these credit card accounts (maybe due to rate hikes), or is the issuer doing it?

Just curious here.  Ideally, you'd want to have some open, low utilization % tradelines to boost your score before app'ing for a mortgage.  One revolving account, at least.

Also, if you were to app for a mortgage any sooner than the time it would take to pay off the remaining closed credit card, I'd retract what was suggested above and pay off the credit card first, for score tweaking purposes.