@Anonymous wrote:Hi,
A bit about my current finances:r
1. Creditcard debt 7k, overall utilization 65%.
2. Unsecured loan 5k (initial principal 9k).
3. Car loan 18k at 6.9%.
Age of oldest account is 3.5 years and most recent account is the car loan 7 months ago. I have no debt, no collections, derogatory remarks etc. Zero late or missed payments. I have 3 hard inquiries, 2 should fall off in July 2021.
Current score is 621.
I am planning on trading my car in June, because this one is a POS causing all sorts of issues. I have inheritance money and tax refund coming in within 2 months, to the tune of 16k.
My goal is to trade the car in and pay off my debts, in a way, which maximizes my credit score by June.. so that I can get a better rate for a car loan pre-approval with my local credit union.
Should I pay off the credit cards (7k), pay off the loan (5k) and then use 4k as down payment? OR should I just pay off the credit cards, get the car and then pay off the loan after?m
Im worried closing the loan account will decrease my score.
@Anonymous You'll get more FICO bang for the buck when you optimize your revolving (CC) accounts to optimal levels. Initiate AZEO All Zero Except One card reporting a small balance before the time you apply for auto loan.
1-9% aggregate utilization.
1-29% individual utilization.
@AllZero wrote:
@Anonymous wrote:Hi,
A bit about my current finances:r
1. Creditcard debt 7k, overall utilization 65%.
2. Unsecured loan 5k (initial principal 9k).
3. Car loan 18k at 6.9%.
Age of oldest account is 3.5 years and most recent account is the car loan 7 months ago. I have no debt, no collections, derogatory remarks etc. Zero late or missed payments. I have 3 hard inquiries, 2 should fall off in July 2021.
Current score is 621.
I am planning on trading my car in June, because this one is a POS causing all sorts of issues. I have inheritance money and tax refund coming in within 2 months, to the tune of 16k.
My goal is to trade the car in and pay off my debts, in a way, which maximizes my credit score by June.. so that I can get a better rate for a car loan pre-approval with my local credit union.
Should I pay off the credit cards (7k), pay off the loan (5k) and then use 4k as down payment? OR should I just pay off the credit cards, get the car and then pay off the loan after?m
Im worried closing the loan account will decrease my score.
@Anonymous You'll get more FICO bang for the buck when you optimize your revolving (CC) accounts to optimal levels. Initiate AZEO All Zero Except One card reporting a small balance before the time you apply for auto loan.
1-9% aggregate utilization.
1-29% individual utilization.
^ +1 and welcome to the forums @Anonymous
Edited for spelling
Free or $1 you can obtain your 3 bureau FICO 8, plus EX Auto 2, EX Auto 8 scores and reports at Experian or CreditCheckTotal (part of Experian). Cancel in 7 day or less to avoid the re-occurring monthly charge. Wash, Rinse, and Repeat as needed.
I was in a similar situation not long ago, except add $30k to those cc balances and I didn't get a lump sum of money, but got a better paying job. I sold my car (was upside down by a few thousand) and paid the balance off and bought a 2010 Honda Accord with 150k miles on it for $5k. No car payment and great gas mileage. This was tough because I LOVE nice (and fast lol) cars. I'm in process of paying my credit card balances off and letting my credit age (also referred to here as "gardening"). I mention this because it may be an option for you as it worked well for me to have some extra $ around (invest it!) and wait until you have a few wealth building avenues before getting back into another car loan debt. Can you sell your current car for what its worth? (or close to it?)
Paying your car loan or personal loan off will ding you, but not much, but paying your cc balances off (AZEO) will outweigh it by quite a bit. Now that I don't have a car payment, I really have to think about if I want one again 
-Pay CC's off and impliment AZEO (almost $7k)
-Sell and pay off current car. Purchase a decent, reliable car you can drive daily with cash. ($4-6k)
-Keep loan and put it on auto-pay. (revolving debt $5k)
-Watch scores as they go up into the 700's in the months to come, all the while you're saving your car payment amount every month.
Just my $.02
@Anonymous wrote:Just thought I'd post it. I got my credit balance to AZEO, and my FICO has jumped to 760!!
Thank you so much for all the advice!
Congratulations!
