Need advice on paying down debt to buy a home

[Anonymous]

I have 2 credit cards, A: 300 limit, no balance, and B: 13,300 with balance of 13,000. I have 2 vehicle loans one balance of 37,000 and the other is almost paid off with a balance of 7,500.

Using tax refund and stimulus money, I will have about 8,000 to use towards my debt. How should I go about paying down to maximize my credit scores as quickly as possible. Goal is to be out of our rental by Christmas and into a forever home.

I thought about making 1,000 payments monthly on my credit card, and continue to pay off my vehicle loan, the 7,500 one, each month.

Or should I go ahead and pay off the vehicle, and then take the monthly payment for it, 620.00, and put that monthly towards the credit card.

Please give me advice, on how to approach my debt, for the quickest and biggest increase to my scores. Thank you.

[dragontears]

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@Anonymous wrote:

I have 2 credit cards, A: 300 limit, no balance, and B: 13,300 with balance of 13,000. I have 2 vehicle loans one balance of 37,000 and the other is almost paid off with a balance of 7,500.

Using tax refund and stimulus money, I will have about 8,000 to use towards my debt. How should I go about paying down to maximize my credit scores as quickly as possible. Goal is to be out of our rental by Christmas and into a forever home.

I thought about making 1,000 payments monthly on my credit card, and continue to pay off my vehicle loan, the 7,500 one, each month.

Or should I go ahead and pay off the vehicle, and then take the monthly payment for it, 620.00, and put that monthly towards the credit card.

Please give me advice, on how to approach my debt, for the quickest and biggest increase to my scores. Thank you.

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The biggest score gain would be from paying revolving credit. Paying off loans will have minimum if any gains for mortgage scores. 

[hsfun2019]

I agree.  Pay down the cards.   I'd pay off the small one and then dump the rest into the large one.  

I saw my scores go from MMS of 647 to 700 in 4 weeks due to paying off CC debt.  (I've paid over 20k in CC debt off in the last 4 weeks)  

[gdale6]

Put it on the credit card and you need to open a 3rd revolver as 3 are needed for best Fico scores, get the 3rd one ASAP as you dont want new credit within 6 mos of mortgage pulls. Also obtaining more available revolving credit should increase fico some. With 13K on the 13.3K card you are getting a double whammy as well since a card is considered maxed once it passes 89% of its CL. Welcome to myfico

[Anonymous]

Sorry, I forgot I do have a third. Limit of 2,600 and balance of 0. I forgot about it because I havent used it in a really long time. As for paying down the 13.3k card, is it better to pay one big chunk all at once, like the whole 8,000, or is it better to space large payments on it over months?

[gdale6]

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@Anonymous wrote:

Sorry, I forgot I do have a third. Limit of 2,600 and balance of 0. I forgot about it because I havent used it in a really long time. As for paying down the 13.3k card, is it better to pay one big chunk all at once, like the whole 8,000, or is it better to space large payments on it over months?

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If you are paying interest you want to bring it down as fast as possible. i would probably do it 8K over 2 months time. There are brackets that result in fico score increases the less than 89% is one as bring the balance below this point results in losing the maxed out penalty, then below 59%, 29% and 9%. You can go over to the Understanding Fico Scoring forum and get more info on these percentages.

Adding: I suggest you put a little spend on that 3rd card since you say you have not used it in awhile, creditors are closing cards for non use at a record pace these days. I got my Fifth Third card closed for not using it for 6 months. Always put a few bucks on cards you may not use oftern every 3-6 months to make sure they stay active. I was able to get that 5/3 card re-opened as I found out about it before the 30 day grace period had expired.