Tuesday, November 8, 2011
Is it better for my Credit Score to pay off a NEW loan A.S.A.P. or in monthly installments?
One month ago, I purchased a mattress with "in-store financing" for about $950. The interest is 0% for 12 months, and the store DOES report to Credit Agencies (financing is through Wells Fargo). With my "spare-time job" I made enough to pay it off in full today if necessary. However, I was wondering if it was better for my credit score to pay it off now--only a month after obtaining the "loan"--or if it would be more beneficial to pay it off over a long period of time through monthly installments (obviously being cautious to pay off the balance before the 12 month interest-free period had expired...$100 a month will be more than sufficient). I have more than enough money saved in case of emergencies. This money is unexpected income, and I have decided that its best use is to put aside to pay toward this loan rather than save for anything else. I already have a credit card, and do not plan on obtaining another one any time soon, so that isn't a factor, either. Any references to websites with this and other answers would be greatly appreciated.
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