Impact on FICO score of credit card debt versus auto loan

[Anonymous]

Hi,

I currently have $10k left on an auto loan.  I am considering paying this off using at balance transfer offer from a credit card. This would be a lower fixed rate for the life of the balance and would only use 30% of the available credit.

My question which has a bigger negative impact on my credit score - $10k in cc debt or $10k in an auto loan?

Thanks! 

[cobaltnv]

The 10k on a cc is considered unsecured debt versus the 10k secured auto loan (which is an installment loan). THese are different in the eyes of FICO and my understanding is that the auto loan is better (provides a mix of credit). That being said the "correct" answer to your question will depend on your situation.

What are you current credit scores?

Do you plan on making any major purchases in the next few months/years (house, car, etc)?

What is the BT interest rate and the car loan interest rate?

Welcome to the forums you will find lots of great information on here (I know I have)

Cheers 

[cobaltnv]

Two other questions:

How many credit cards do you have?  This is important because you do not want to make any purchases with a card you have a BT on as any payments will pay off the lower interest rate first. You also want less than half of your credit cards to report a balance.

Is the 30% of your total available credit or the available credit on the BT card only? 

Message Edited by cobaltnv on 12-02-2008 11:40 AM

[Anonymous]

Current credit scores are 740-760.  Auto loan is 8% vs. BT 6%.  May look at some large purchases in the next 6 months.

Thanks!

[cobaltnv]

If you are looking at some large purchases I would leave your auto loan alone as having that will help your credit. IMO the difference between 6% and 8% is not worth the hit you will take on your credit score.