Where should I put my inheritance money?

[Anonymous]

I recently received an inheritance of $10,000.  I have paid off all small cc accounts and put more on larger ones ($2500 or less) as well as paid regular bills.  I still have about $5,000 left of it but my hubby has some cc that need to be brought down in balances.  My dilemma is, do we put the money toward paying off his truck with a balance of $3500 or put it all toward the rest of the credit cards?  We need to have the truck paid off by July and it would free up $500 a month but I want our scores to go up since I spaced a bill and now have a 30 day late on one of my accounts that I just paid off.  I have been great with our credit lately and can't believe that I did it!!!!

[Anonymous]

Only you have a true look at your $ outlook.

Do you have 2-3 months of savings already?

Did you fund your IRA?

I would GW that late-

[Anonymous]

Try to GW "letter" the lender to reverse the 30 day late. Try again and again.

As far as choosing which debt to pay down, To me it boils down to paying as much as possible on the "highest interest" debt. However your score will be higher if you pay off credit card debt regardless. I would figure out which has a higher rate of int and pay there.

Message Edited by ilovepizza on 01-20-2008 07:45 AM

[fishbjc]

Don't forget to save $$$ for inheritance tax. 

[Anonymous]

GW the late.

Pay down hubby's credit card balances, highest interest rate ones first.

Paying off of an installment loan can lower score due to mix.  Lenders like to see installment and mortgage loans in good standing.

[Anonymous]

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@fishbjc wrote:

Don't forget to save $$$ for inheritance tax.

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Whoa. Good call! Check to see if you will have taxes on this amount. Some amounts are taxed differently and some not at all.

Message Edited by ilovepizza on 01-20-2008 12:00 PM

[Junejer]

GW the late, check into the limit on inheritance b4 taxation ($11,000 rings a bell). You mentioned July as a magic date. What's happening then? Mortgage? If you want the scores up quicker, then pay down CCs. You can always take the extra $ that you aren't paying on the CCs and apply towards the vehicle. Typically, the mortgage company will not calculate an installment loan payment into your D/I ratio if there is less than 10 months left on the loan.

[Anonymous]

I figured that I would pay down the higher rate cc's.  The July date is when the loan for the truck is up. 
I am going to write a GW letter today and mail it off.  I didn't know that was something that you could do.  That's awesome, but I read on here that someone didn't have luck with Chase.  Yet.  However, I just paid the balance in full so maybe they will see that as a positive. 

Thank you very much for all of your input!!  I love this site!!