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What debt to pay first

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What debt to pay first

Hi!

 

I am wanting to purchase a home before the end of 2019 (my current lease ends in January 2020). I have about $2,700 I can put towards debt this month. Where is the best place to put it considering credit score, credit utilization, DTI, etc.?

 

Gross annual salary is $89,000

Mortgage will be in my name only (separate from spouse and we are in a community property state)

 

My debt:

Capital One CC $75/$750 limit

Uplift $386

Exeter Finance (joint auto loan) $2,671

457 Loan $4,054

Family Loans $4,523

Capital One CC $4,874/$5,500 limit

Capital One (individual auto loan) $26,152

AES Sucess (student loan) $28,413

 

Let me know if you need any other information. Thank you!

 

 

 

Message 1 of 5
4 REPLIES 4
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Community Leader
Super Contributor

Re: What debt to pay first

Hello OP and welcome to the forum

 

With your $2.7K, this is what I suggest:

 

Capital One CC $75/$750 limit YES

Uplift $386 YES

Exeter Finance (joint auto loan) $2,671 NO

457 Loan $4,054 NO

Family Loans $4,523 NO

Capital One CC $4,874/$5,500 limit YES, $2,239

Capital One (individual auto loan) $26,152 NO

AES Sucess (student loan) $28,413  NO

 

  • No need to pay toward 457 because this loan you're paying yourself back and I don't even think this count as a debt when applying for a mortgage.
  • I think hold off on paying toward family loan because this also is not a debt that would be counted. Hopefully, they'll understand.
  • Paying off Cap1 and Uplift will put two accounts at $0 balances, which will give your scores a small bump.
  • Paying $2,239 will put UT at 41%, down from 87% (that's 2 thresholds), which will also net a point or two.

Hope this helps

 

 

 


DEC 2019: EX 816, TU 820, EQ 810
DEC 2018: EX 777, TU 783, EQ 799

|| AmX Cash Magnet $40.5K || NFCU CashRewards $30K || Discover IT $24.7K || Macy's $20K || NFCU CLOC $15K || CitiCostco $12.7K || NFCU Platinum $12.5K || Apple Card $6.5K ||
Message 2 of 5
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Re: What debt to pay first

Thank you! I have another question ...

For credit score purposes ... is it better to have 1 credit card at $0 (I have a total of 2 credit cards) or is it better to have a small reoccurring amount (like Netflix) charged to the card every month? Also, if I keep a balance, what percentage should it be? I have read 1-9% ... is that the best for credit score purposes?

I have seen both methods recommended.

Thank you again for all of your assistance!
Message 3 of 5
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Community Leader
Super Contributor

Re: What debt to pay first

Since you only have 2 CCs, yes, for scoring purposes, let one card stmt balance report $0 and the other report less than 8.9%.

DEC 2019: EX 816, TU 820, EQ 810
DEC 2018: EX 777, TU 783, EQ 799

|| AmX Cash Magnet $40.5K || NFCU CashRewards $30K || Discover IT $24.7K || Macy's $20K || NFCU CLOC $15K || CitiCostco $12.7K || NFCU Platinum $12.5K || Apple Card $6.5K ||
Message 4 of 5
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Re: What debt to pay first

Awesome ... thank you! Smiley Happy
Message 5 of 5
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