@AnonymousWelcome
Credit card util does more to a score than a loan points-wise. The only real score change moves on a loan is once its under 9%. We say finances over FICO. If you could list out the accounts you have. Then we can help you with a plan to get a hold of things.
Creditor/Credit Line/Balances/APR
This^^^^^^ from @pizzadude
If there wasnt a loan then it would be easy. Util doesnt move the needle much with loans as i said earlier until its under 9%. Thats why we say Finances over FICO. If the loan is the highest rate APR over your cards. Focus on getting that paid down. Once the loan is out of the picture. Then nail the cards and get them all the way down. Paying interest is like throwing a buck out your window on the highway every mile. Your not going to get it back. If you did. I'd be coming to save your.........
@Anonymous wrote:We need to consolidate our debt and am looking at some options. But first we have 3,000 to 4,000 to throw at it to get some of the utilizations down to possibly get a better interest rate. One is an installment loan from last summer when our HVAC failed. The payments are ridiculously almost all going to interest and we are still well above 90% utilization several months later. Would paying extra on this loan so it is less than 89% make a difference or should we apply that money to a credit card? It has the highest utilization and our FICO has taken a huge drop since we took it out last summer.
No. A payment to your installment loan would probably mean nothing for your scores, whereas properly placed payments to credit card accounts could work wonders, depending on what's in your profile.
@Anonymous wrote:
@FireMedic1 wrote:@AnonymousWelcome
Credit card util does more to a score than a loan points-wise. The only real score change moves on a loan is once its under 9%. We say finances over FICO. If you could list out the accounts you have. Then we can help you with a plan to get a hold of things.
Creditor/Credit Line/Balances/APR
I would list them out, but I made a spreadsheet with all their limits and each amount the tiers of 88%, 68%, etc., current balances and how much to pay off to get to the next tier. The highest is Costco VISA that gets our gas and groceries and that one is near its limit right now, so I would like to pay it down to 88%. The rest are lower than that. Some cards need less than $100 to get to the next tier, one can be paid off completely. I have $3000-4000 to throw at them right now and that would move the Costco Visa below 88%, the HVAC loan below 88%, 3 cards down to 68%, 1 card to 48%, and 1 card to 0.
Almost all cards are at 0% right now, so most payments are all principle and we usually pay more than minimum payment, but all those payments are killing our budget, so we would like to refinance them into something for a smaller payment. We've been planning that since last fall as our family expenses have increased substantially (life insurance policy monthly payment went from $40 to almost $400, car insurance more than doubled, not to mention the increase in gas and groceries prices). We haven't taken a vacation since 2018, and never eat out, but we have kids with food allergies, so that impacts the grocery bill. I'm hoping once our scores come back up, we can shop around for better insurance.
Last summer, our FICO 8 scores were at the mid-700s, now they are below 700. We saw a huge drop when we took out the loan for the HVAC. That balance has barely budged, we still owe $7300 out of $7500 after 7 payments. It's a horrible loan. I assume it's being reported more like a credit card, not something like a car loan. So I'm thinking making a principal only payment to get it to 88% would help.
1. Installment loans don't get reported as credit cards.
2. So work on getting each credit card account down. The most important tiers are below 50% and below 30%.
Just going to reiterate a point that's been made a few times here, your score doesn't matter unless you're actively seeking new credit. You shouldn't be actively seeking new credit at this point because it's sounding like you're in an uncomfortable debt position already and need to just focus on maximizing the effects of the money you do use to pay down the debt - focus on whatever is the highest rate and snowball from there.
as of 1/1/23
