I've been contemplating this for a few days now and am wondering if I should close out the CreditStrong loan that I have. I went a little zealous and did the $18,000 loan. I thought it would look good on the report if I had something of that size on there. No other reason really. Now that I am paying down the student loan (Navient) that I have and getting closer to <9% balance on that, I am wondering if the CreditStrong loan is holding me back.
I got the CreditStrong loan in November and it has been paid on for six months. Current balance of $17,200 of $18,000. The benefit being that I can close the account at anytime and have it show that it was paid as agreed. The downside is that it's only six months old. The upside is that I will go from two installment loans (CreditStrong and Navient) down to one and the balance percentage will also dramactically drop from ~80% to 50%. I could also use the money I'm spending on that monthly to offset the increase that I am doing on the Navient loan.
What are the thoughts of the community? I'm 50/50 on this. Would there be a difference if I kept the CreditStrong loan for a year instead of six months? I'm trying to squeeze all of the points that I can on my rebuild.
Thanks
Student loans are considered “installment loans,” meaning they generally carry a starting balance that's repaid over time with a fixed number of payments. Home mortgages and auto loans also typically fall in this category. Since you have your student loans. Extra loans doesnt really do much. FICO likes just 1 and hopefully you have at least 3 revolver credit cards. Your set. Yes it will look good for payment history and such to other lenders. Closing it will do more for you in the scoring catagory.
Since Navient is under 9%. That will give you some points because of the low util on the one account. But FICO looks at the combined loans and util %'s are figured in. So yes the other one with high util is overpowering the lower util account. But if Navient can/will be PIF and the other one is still open. Pay that one down to <8.9%. Simple way to put it. Whichever one will stay open the longest. Keep that one and close the other. You dont want 0 loans reporting. That will whack you 20+ pts or more depending on your profile.
@uphill_slipnslide wrote:I've been contemplating this for a few days now and am wondering if I should close out the CreditStrong loan that I have. I went a little zealous and did the $18,000 loan. I thought it would look good on the report if I had something of that size on there. No other reason really. Now that I am paying down the student loan (Navient) that I have and getting closer to <9% balance on that, I am wondering if the CreditStrong loan is holding me back.
I got the CreditStrong loan in November and it has been paid on for six months. Current balance of $17,200 of $18,000. The benefit being that I can close the account at anytime and have it show that it was paid as agreed. The downside is that it's only six months old. The upside is that I will go from two installment loans (CreditStrong and Navient) down to one and the balance percentage will also dramactically drop from ~80% to 50%. I could also use the money I'm spending on that monthly to offset the increase that I am doing on the Navient loan.
What are the thoughts of the community? I'm 50/50 on this. Would there be a difference if I kept the CreditStrong loan for a year instead of six months? I'm trying to squeeze all of the points that I can on my rebuild.
Thanks
It will help your FICO 8's and 9's to pay it down to 9%.
