"Amounts Owed" question?

[Anonymous]

I have a question regarding the scoring factors of "Amounts Owed"

So between my 2 student loans and my car loan I owe about $18k.  Keep in mind these are some of my oldest accounts so I like to keep them open. Let's say I were to send in about a thousand for each account and bring my debt down to $15k combined, could I expect to see a score increase? Would it be substantial?  

For whatever it's worth my CC Utilization is always below 9%

Thanks!

[Anonymous]

Maybe, maybe not. With installment loans there are "break points", thresholds as a percentage of the original loan amount at which you see score improvement. If the payments cause the loan/s to drop below a break point, you may see a bump. If not, you won't.

[SouthJamaica]

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@Anonymous wrote:

Maybe, maybe not. With installment loans there are "break points", thresholds as a percentage of the original loan amount at which you see score improvement. If the payments cause the loan/s to drop below a break point, you may see a bump. If not, you won't.

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Agreed, and none of us really know what the break points are, we're always playing around to try to figure them out. The ones that I see pop up the most in discussions are 79%, 49%, 29%, and 9%.

[Anonymous]

I guess I will send the money in anyways and see what happens. Less interest for me in the long haul anyways. 

[Anonymous]

Do you mind telling us the interest rate on each account?  Also the month/year you opened each?  (Since age of account is important to you.)

The other commenters are alluding to how much the loans were originally for.  That's what they are getting at when they talk about percents.  The percent in question looks at all your open loans together (ignoring the closed loans).  You divide the total amount owed by the total amount all the loans were for.  The percentage paid off on each loan individually doesn't matter -- just all the open loans taken together.

If the interest rate is significantly different between the three loans, it is far better to pay down the higher interest loan.  You can likely pay down the principal while still keeping the loan open.