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New Member

Debt

How do I pay a debt that is affecting my credit score

4 Replies
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New Member

Debt

Hi,
I am going to assume that you have debts from multiple sources, credit cards, loans, etc.

 

From a credit score perspective, yes, how much you owe/your debt affects the score. They typically have this debt (sum of all debts) to income (sum of all income) ratio. It's generally recommended to keep that below 36% to be considered "healthy" so to speak. But I understand that's not necessarily always true for a lot of us.

 

So one of the first things you can do, from an "overall" perspective is aim for a DTI ratio of <36%.

Going specific,
1. Depending on how much you owe on what, and for how long, I'd start with paying off the debt/account with the highest interest rate.
2. Secondly, the type of debt plays a role too. Do you have a car loan or a mortgage that you have been paying consistently? If so, it's actually considered healthy. You're treated as "reliable". someone that can be trusted with money. But sure paying these off can improve your score from my knowledge. But, it's something I wouldn't prioritize on -- if you have other debts. The only benefit here is that you won't have to worry about it, and you'll save on interest (which actually can be hige). Personally, I am trying to pay off my car loan early. It feels like a headache at this point :-D. 

 

 

High-Level

1. Yes, how much you owe plays a role in your credit score.

2. But if there are consistent payments (no missed payments) on things like car loans, mortgage, I wouldn't prioritize those in the sense of I want to pay those off first. But again, it' a personal choice. Not fully aware of your situation.

3. If there are other debts, or credit card debts with super high interest, I'd start with those first. Typically, paying only the minimum amount on credit cards may help you not get reported for being delinquent, but the interest they charge you on that is very high. 

 

Hope this helps!

 

 

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Returning Member

Debt

I have one more payment left on my car till it's payed off I lost my job and have no money and I have 4 days to take care of it what do I do

 

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New Member

Debt

A lot of the auto manufacturers, are working with existing and new customers for this situation. https://www.jdpower.com/cars/shopping-guides/automakers-create-coronavirus-car-payment-plans actually has great details about each OEM.

 

Since you only have 1 payment left, I am quite confident that if you call the bank/lender (whoever you have the loan with), they'll be willing to work with you!

 

 

Good Luck!

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New Member

Debt

Mt identity was stolen how do I go about getting it fixed with no income