Best course of action

[OntheHorizon]

Hello all,

So I have a chance to pay some things off, but can't decide which road to take.  Should I 1) concentrate the bulk of my funds on paying off a loan that is 23%, or 2) make minimums on the loan and use the bulk of my money towards CC?  I don't plan on applying for anything until closer to end of the year, but what bothers me is having this stupid loan at such a high rate.  But I know by paying it off my scores won't really change?  Should I focus on the loan which will free up $$ towards CC, or should I focus on the CC now, raise my score and get a loan (at a better rate because my score will be higher) to pay off the higher int. loan?  I guess my question is, what would you do if you were in my shoes?  BTW, I don't have the money all at once, I will be able to make payments of 700, then 250, then 1100, then 800.  I really value this forum so some advice would be greatly appreciated!!

Loan balance:  2683 23% int.(can have paid off NLT 1 Sept if i really focus)

CC:

Military star 2253/3200 (this is the one that would help my score if I got util down)  10.99% int.

Amex Delta 360/1000  9.99 % int.

Hooters 230/1100 15 % int.

CU mastercard 0/1000 

Cap1 0/500

Credit1 0/700

Target 0/500

VS 0/350

Spiegel 0/250

(haven't pulled updated scores in a while)--from FICO

5/19 EQ 578

4/19 TU 617

[Anonymous]

I would pay the loan first.

You don't know that your score will go up very much.  It's very much a guessing game as to how much your score will raise.  Although, some can make more educated guesses than others, they are all still guesses.  Meanwhile, you could be paying more and more in interest while still guessing and hoping your score will raise enough that someone will give you a better loan.

If it makes you feel better (and it would probably make me feel better), pay off the Hooter's card at 15% and then tackle the loan.  You could do that with your first allocated payment amount.

[iamrayl]

I would pay down the balance on the card with the high util, you can leave a small balance on that one, pay off the hooters balance like the other poster suggest and I would use the remainder of the money towards the loan, maybe pay ahead for several months and then use that money that you would usually pay the loan with towards keeping util low. In many cases, paying off installment accounts seem to have little to no impact on your credit score as you can see from other posters that have paid off their loans in advance. 23 is indeed a high rate but don't feel too bad, i have a personal loan for 7000 that is at 25%, but once my scores continue to improve i will contact the creditor and refinance, when i signed the paperwork for the loan the loan officer did inform me that the rate wouldn't go past 25 but I could refinance it in a year or so if my score improved.

[marty56]

Unless I did the math wrong, you are at 33% util which is too high.  Bring the util to 9% and have only one card report a small balance under 9% as well will give your scores a boost.  Perhaps enough to qualify for a 0% BT card to kill the 22% loan or not.

[Anonymous]

If your only concern is the interest then pay off the loan and pay double the minimum on the others.

If you are concerned with your FICO score because you need a loan or credit increase very soon then pay down the military star first then the amex delta to at least 19%.