@Anonymous wrote:Without going into why I needed it, but I recently took out a personal loan for $19,500 with an exorbitant interest rate (24.99). The reason I did it is because I am in the rebuilding phase...2 CC perfect history and a Derog for a 6 year old installment loan. I had no history of any kind of installment loan except for the Derogatory one. I couldn't get the money anywhere else and I needed it quick for an investment knowing I would have the money to pay it back in no time.
I now have half the money ($10,000) to pay down on the debt and will have the rest within a month or two. I can't refinance for 6 months and even if I did I do not think that it would help me that much because my credit is only in the mid 600's (was 672 before the loan hit)
What should I do? I plan on buying a house and car within the next 6 months so increasing my score is a priority, but at the same time I do not want to pay 25.99% for 5 years. Should I pay the $10,0000 on the principal this month and then make my payments where I pay it off in 12 months so that I keep the loan open and it help my credit? Should I go ahead and pay it off and then take another hard inquiry on a much smaller loan so that I have an open installment loan?
Any input will be helpful, I am new to watching my credit. Thanks.
We would need more information to give you good advice, especially what is your revolving account situation: number of accounts, limits, balances.
Also when you say you want to improve your "score" you need to decide which score. The mortgage scores behave very differently than the FICO 8 scores. I assume your priority is the mortgage scores, since that's where a better interest rate will translate into the most dollars saved.
When you give us more information and tell us which score you're talking about, we'll be ready to steer you in the right direction.
@Anonymous wrote:I have 12,500 in revolving credit available, over 3 cards. I pay all off each month and leave a small balance on one of them. (Less than 2 %). I'm not sure on what scores you are talking about because I am not familiar with the difference, but I would guess I want my mortage scores the highest because a mortage loan is my number one priority.
I have derogatory that falls off in may of next year for an installment loan of $600. (I have tried everything to get it removed)
No closed accounts other than that.
My fico scores are: 650,652,657. (They just took a hit this month because of the loan I just got.)
You should have 2 of the credit cards report a zero balance, and 1 of them report a small balance which you then pay off. That should be your highest priority.
Then pay down the installment loan as fast as possible.