What to do with a new loan?

[Anonymous]

I'm one of those people who made the mistake of cosigning on a mortgage loan for someone and as a twenty something year old now am at 609-TU & 647-EF scores respectively. With several delinquencies by that person that I cannot control, I'm unsure of how to stop the bleeding so to speak short of filing bankruptcy.

With approx 3 semesters left (and grants/additional loans covering most of it) I recently took out an unsubsidized Stafford Loan at 6.8& to payoff my $1700 Visa and $2700 Discover cards, both of which are now at over 20% APR but am unsure of doing that now.

-Would paying these down (I'd like to keep some balance i.e. $100 each) dramatically improve my scores?

My dilema is I have only one vehicle.  It's highly needed for school and work and I can't afford to be without it.

With 200K miles though and recent problems, I'm unsure if I should apply the loan and my savings towards another used vehicle or risk paying down my cards only to still get denied for any potential auto loan.

My previous 5yr auto loan was paid off with no late payments last year.

Message Edited by CleverUsername on 10-17-2009 04:43 PM

[marty56]

Welcome to the forum. 

Just let a single card report a small balance (9% or less of its CL) and always PIF. 

I would also post in the mortgage section and the credit repair section to find out the mortgage problem.  I would make it my number one priority to get your name off the mortgage as soon as possible.  I dont know if the BK would get rid of the mortgage problem and I would avoid BK at all cost anyway.

I feel for you in that you tried to help someone and its comming back to hurt you.  

[Anonymous]

Thanks Marty.

Will head off to the mortgage section shortly.

I was just wondering if you or anyone else could approximate or clarify how this would effect my scores.

Is it a dramatic increase or miniscule?

Those cards are at their near peak respectively:

1700/2000 limit

2700/3200 limit