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kingdf

Buying Points

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When I say "buying points" I'm not talking about some scam company. Moreso the concept of strategically paying down debts to get the biggest point gains.

 

Here's what I'm looking at right now.

 

My car payment is $417 and I usually pay $600 (I owe just over $11,400)

My student loan payment is $76 and I pay $76 (I owe just over $6,900)

 

Would my extra $183 that goes toward my car give me bigger boost if I applied it to my student loan or does it even matter?

 

 

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Looks like you’re doing the right thing. Student loan interest is tax deductible, so better to pay off other debt first. 

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Posted (edited)

As a general rule you'll get much more of a score benefit from paying down revolving balances and doing the $2 trick (assuming a clean file).

 

Micromanaging your installment balances isn't going do much.

 

What is the driver behind the desire for higher scores?  Without a compelling reason to the contrary, pay the accounts with the highest interest rates first.

 

Edited by cv91915

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9 hours ago, cv91915 said:

As a general rule you'll get much more of a score benefit from paying down revolving balances and doing the $2 trick (assuming a clean file).

 

Micromanaging your installment balances isn't going do much.

 

What is the driver behind the desire for higher scores?  Without a compelling reason to the contrary, pay the accounts with the highest interest rates first.

 

Not familiar with the $2 method, but I'll look it up.

 

My driver behind the higher score is real estate. I'm sure after the aftermath of this virus situation, people are going to be selling and discounting. I happen to be flush with cash and fair credit.

 

I don't actually need my credit cards to live on. I honestly use them just to build credit history. My living expenses are about 20% of my income.

 

I'm already aware of snowball and avalanche methods. That's not my goal. I'm specifically interest in actions that will increase my points AND leave me with access to money.

 

I think I'm going to go ahead and start paying my car note with my cc and then paying off that balance immediately, so I still have it available as credit, car note gets paid, and I only lose access to $183 a month. I did a little more research.

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54 minutes ago, kingdf said:

Not familiar with the $2 method, but I'll look it up.

 

My driver behind the higher score is real estate. I'm sure after the aftermath of this virus situation, people are going to be selling and discounting. I happen to be flush with cash and fair credit.

 

I don't actually need my credit cards to live on. I honestly use them just to build credit history. My living expenses are about 20% of my income.

 

I'm already aware of snowball and avalanche methods. That's not my goal. I'm specifically interest in actions that will increase my points AND leave me with access to money.

 

I think I'm going to go ahead and start paying my car note with my cc and then paying off that balance immediately, so I still have it available as credit, car note gets paid, and I only lose access to $183 a month. I did a little more research.

As I mentioned, what you do with your installment loans will have little (if any) impact on your scores.

 

To keep your scores high, make every payment on time, keep your revolving utilization low, and in the case of the mortgage-specific FICOs, avoid opening new accounts.

 

The logic behind making the car payment with a credit card is completely lost on me. 

 

Good luck.

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3 hours ago, kingdf said:

I think I'm going to go ahead and start paying my car note with my cc and then paying off that balance immediately

Unless you're getting a credit card reward for doing so, this won't do you a whole lot of good.

 

3 hours ago, kingdf said:

I'm already aware of snowball and avalanche methods

You must follow DR

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installment loans and installment balances matter so little for FICO you are probably better off dealing with larger issues such as revolving utilization and making sure you have a thick file (which may mean adding new quality tradelines and taking a short term AAoA hit for long-term gains)

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