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Is it better to pay off $35K at once, or over time?

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NotDavidLindhagen
New Member

Is it better to pay off $35K at once, or over time?

Was at $65K in CC debt (4 cc, and 1 AMX), but paid off $30K one day last week.  

Is it better to pay off the remaining $35K all at once, or to spread out the payments over how many months to show payments history while still accruing interest?


BK7 DC: 6/2014 (Chase, WF, and BofA were IIB) No late payments or baddies since BK7.
GOAL: Gardening 'till October 2022 before applying for core/legacy bank cards with Citi, BofA, and WF (Chase will have to wait until 8/2024).
Amex Platinum & Rose Gold (0%) || Discover $25.5K (≤1%) || Barclays JetBlue Plus $17.5K (0%) || Capital One Venture $12K (0%) || Apple GS $11K (0%)
TCL: $66K [Primary on all lines]
2 HPs as of January 20, 2022:
EQ: None
TU: 8/27/20
EX: 3/18/20


Message 1 of 6
5 REPLIES 5
GatoradeZeroGuy
Valued Contributor

Re: Is it better to pay off $35K at once, or over time?


@NotDavidLindhagen wrote:

Was at $65K in CC debt (4 cc, and 1 AMX), but paid off $30K one day last week.  

Is it better to pay off the remaining $35K all at once, or to spread out the payments over how many months to show payments history while still accruing interest?


you get no bonus for 'payment history' by having a balance

 

you get positive payment history by making on-time payments, regardless of the balance of those payments, even if they are 0

 

pay that off immediately and save yourself the interest 

 

afterwards, just pay your bills in full every month and you should be good

 

if you want to absoultely maximise your FICO score, you can ensure that only one credit card reports balance under 5% to your report at any given time, your credit report should look like this: 

 

you can pay cards down to 0 prior to the bill generating so they report 0, even if you used them during the month

 

image.png

Starting FICO 8:

Current FICO 8:

1/6, 5/12, 12/24




Message 2 of 6
SouthJamaica
Mega Contributor

Re: Is it better to pay off $35K at once, or over time?


@NotDavidLindhagen wrote:

Was at $65K in CC debt (4 cc, and 1 AMX), but paid off $30K one day last week.  

Is it better to pay off the remaining $35K all at once, or to spread out the payments over how many months to show payments history while still accruing interest?


Better to pay it off all at once.

 

 


Total revolving limits 741200 (620700 reporting) FICO 8: EQ 701 TU 704 EX 685

Message 3 of 6
NotDavidLindhagen
New Member

Re: Is it better to pay off $35K at once, or over time?

Done!!  I'll focus on keeping AZEO staying steady.  TY!!   


BK7 DC: 6/2014 (Chase, WF, and BofA were IIB) No late payments or baddies since BK7.
GOAL: Gardening 'till October 2022 before applying for core/legacy bank cards with Citi, BofA, and WF (Chase will have to wait until 8/2024).
Amex Platinum & Rose Gold (0%) || Discover $25.5K (≤1%) || Barclays JetBlue Plus $17.5K (0%) || Capital One Venture $12K (0%) || Apple GS $11K (0%)
TCL: $66K [Primary on all lines]
2 HPs as of January 20, 2022:
EQ: None
TU: 8/27/20
EX: 3/18/20


Message 4 of 6
NotDavidLindhagen
New Member

Re: Is it better to pay off $35K at once, or over time?

Ouch!!!!!   All three scores plummeted: 

-14    Equifax
-23    TransUnion
-22    Experian

 

This is some tricky stuff.  I didn't know about the option of trying to keep the AMEX personal loan "open" even though I paid that off that balance, too.  I've read that all the scores will rebound, but I only expected scores to go up.  I'll just focus on my AZEO for 11/1/2023.  

Wish there was a FICO forum for those with ADHD.  There's just so much material to sift through. 


BK7 DC: 6/2014 (Chase, WF, and BofA were IIB) No late payments or baddies since BK7.
GOAL: Gardening 'till October 2022 before applying for core/legacy bank cards with Citi, BofA, and WF (Chase will have to wait until 8/2024).
Amex Platinum & Rose Gold (0%) || Discover $25.5K (≤1%) || Barclays JetBlue Plus $17.5K (0%) || Capital One Venture $12K (0%) || Apple GS $11K (0%)
TCL: $66K [Primary on all lines]
2 HPs as of January 20, 2022:
EQ: None
TU: 8/27/20
EX: 3/18/20


Message 5 of 6
SouthJamaica
Mega Contributor

Re: Is it better to pay off $35K at once, or over time?


@NotDavidLindhagen wrote:

Ouch!!!!!   All three scores plummeted: 

-14    Equifax
-23    TransUnion
-22    Experian

 

This is some tricky stuff.  I didn't know about the option of trying to keep the AMEX personal loan "open" even though I paid that off that balance, too.  I've read that all the scores will rebound, but I only expected scores to go up.  I'll just focus on my AZEO for 11/1/2023.  

Wish there was a FICO forum for those with ADHD.  There's just so much material to sift through. 


If that was your only open installment loan, and you paid it off, you just experienced the "no open loan" penalty.

 

It's counterintuitive, but while FICO 8 rewards you for having your installment loan(s) mostly paid off (i.e. 1% to 9% of face amount(s)), it dings you for having no open installment loans reporting.

 

If you want, you could open a share secured loan with NFCU or PenFed, pay it down immediately to 9% of the loan amount, and get all the lost points back.

 

 


Total revolving limits 741200 (620700 reporting) FICO 8: EQ 701 TU 704 EX 685

Message 6 of 6
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