Credit Cards BEFORE Installment Loans

Posted on January 24, 2020

You’re taking steps to start getting credit healthy, but have debts to pay down. Different kinds of loans impact your score differently when paid down, but where do you start?

The two types of debt that matter for your credit score are INSTALLMENT and REVOLVING loans. Understanding what they tell a credit bureau about your credit worthiness can help you understand why your should start paying down your revolving loans FIRST.

Installment Loan:

➡️A loan which allows you to borrow a SET AMOUNT of money when you take out a loan. You will then have to repay the loan over a FIXED PERIOD of time.

➡️Ex: Auto loan, mortgage loan, personal loan

Revolving Loan:

➡️A loan issued by a financial institution that allows the FLEXIBILITY of withdrawing money, repaying, and withdrawing again.

➡️Ex: Credit cards, personal/business lines of credit

Based on last week’s discussion we already know that your credit score consists of:

➡️ Your Payment History

➡️ Amounts Owed

➡️ Length of Credit History

➡️New Credit

➡️Your Credit Mix

The different loan types provide the credit bureaus with DIFFERENT INFORMATION about your credit worthiness. An Installment Loan provides information on your payment history and whether you can make your payments every month. However, your revolving loans prove both your PAYMENT HISTORY and your CREDIT UTILIZATION, which gives a greater impact on your overall credit score.

If you are looking to boost your score by making additional payments towards your overall debts every month it is better to focus your efforts on paying down your REVOLVING debts to 30% or below of your available credit for a bigger impact!

To learn more click here!

If you’d like to talk about the impact paying down your debt has on purchasing a home COMMENT DOWN BELOW!

Justice Roberts Loan Officer

Justice Roberts

Branch Manager
NMLS# 1269831
206-408-1241
Email Me
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Over the last ten years my family and I have struggled moving from one place to another never staying long anywhere. It was a nightmare changing schools, forwarding mail, packing. Team Justice helped us get the home we've always wanted they helped us put down roots. We are happy to have worked and continue to work with them they go above and beyond. Even helping us refinance. Made buying a home enjoyable.

Viola H.

Justice did a great job with me. Actually better then great. I consider him my life long mortgae man. I highly recommend him and his team. They went above and beyond what they had to do and closed my loan so smoothly and seamlessly and in a very fast time.

Mark D. | Tacoma, WA

The timing of needs and the communication was the best I've ever experienced..bar none! The ease in which documents were submitted and signing of others is phenomenal. I would highly recommend them to anyone I meet..but only if you want exceptional service.

Joseph W. | Tacoma, WA

Justice and his team were an integral part of our home buying process. They made it so easy and explained everything in great detail what we needed to purchase our first home. I would highly recommend this team to anyone. So personable and answered all my questions on the spot with accurate information. Thank you so much!!

Dominique B.

Justice and Jessie where absolutely great to work with, very professional, timely, and on it, I will always do my home lending with them. They made sure to check in with us at least once a week through out the process that lasted over 4 months, not once did I feel like they got tired of working with us or anything. They always have such a great attitude and always wanting to help!

Wascar Carpio

It’s been a pleasure to work with Justice and his team. If you are wanting constant communication through your loan process, immediate response to your questions via email or text, professionalism, and someone to trust as you make a big decision such as buying a home, look no further than Justice and his team. You all have been wonderful to work, thank you again!!

Maria S. | Edmonds, WA

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