Credit Advice

Have a question? Have advice to share? The combined knowledge and experience of everyone in the Credit Karma community can help you. Enter your question or help others below to get started!

Question

Posted in Credit Scores
Profile Image

Question By
spritezero

0 Contributions
0 People Helped
Opinions, please, on the order in which I should do these three things...
Hello,

I am deciding how to stage the following three moves to best influence my FICO score and to accomplish the two applications for credit I will be looking for. Apologies if it rambles on a bit.

1. Paying off my credit card debt of $5000.00 (across 8 cards - balances from $80 to $950)
2. Applying for AAdvantage Citi card b/c of the very high bonus miles (60K) which I want for overseas travel next summer
3. Possible new car loan of approx. $18,000.

I currently have an Equifax score of 706 (Credit Karma - 677). I've raised my score about 100 pts in 18 months and I think that's good progress. I carry about $5000.00 in credit card debt. Due to a coming influx of cash I will be able to pay off the debt in full (if indeed that's the best thing to do) in about 2 months. It seems obvious this is the first thing to do. Equifax's credit simulator predicts a score of 786-820 after paying off my CC debt.

I am unsure about the order I should do the other two. Apply for the card I want first or a new car loan (would be about $18,000) first. Which would be a better idea to do first to assure acceptance for both?

I will also have the option of just buying the car for cash. With financing I would have interest, of course and some sort of affect on my credit score - good or bad? With a cash purchase I would save a bit on car insurance and be able to keep that lump of cash liquid in case of emergency.

Any advice on the best sequence of these things would be greatly appreciated. Thanks.

Your Credit Scores Should Be Free. And Now They Are.

View your scores and reports anytime.

SIGN UP NOW
All Responses

Results 1-2 of 2Results per page: 5 | 10 | 25Page 1 of 1   Previous | Next
2 Contributions
2 People Helped
Most Helpful Response

Helpful to 1 out of 1 people

You'll almost certainly get approved for a car loan, but the better score will translate to a better rate. If you intend to go to maturity of the loan, do it before the card, but you risk the acceptance on the card. If you intend to pay down the loan fast a higher rate has less impact, so go for the card first. In either case, pay off the current balances and wait 30 days for the balances to post to your report.

Top Contributor
17 Contributions
74 People Helped

Your credit karma question.

Sorry for my flip response to your question.  I read your entire question and if you are getting a lot of cash soon I definately would pay off ALL your credit cards but do NOT cancel ANY of them!   Then, if you need a new car, I would finance it, but make double or triple or more payments on it, so you won't get killed with interest.    I would not apply for any new credit cards until your old ones are paid off and make sure that the fact that they are paid off is on your credit report, otherwise, you will hurt your score.  Good luck. 

Results 1-2 of 2Results per page: 5 | 10 | 25Page 1 of 1   Previous | Next

Your Credit Scores Should Be Free. And Now They Are.

View your scores and reports anytime.

SIGN UP NOW

Reply to this Question

Write your response:
Enter Your Comments

The Credit Advice pages of the Site may contain messages submitted by users over whom Credit Karma has no control. Credit Karma cannot guarantee the accuracy, integrity or quality of any such messages. Some users may post messages that are misleading, untrue or offensive. You must bear all risk associated with your use of the Credit Advice pages and should not rely on messages in making (or refraining from making) any specific financial or other decisions.