Which option is better?

[Canuck]

I have two personal loans that I am making monthly payments on. I have the cash in hand to pay them both out in one lump sum if I want to.

Is it better for my credit to pay them off right now, or would it be better to keep making timely payments on the balances to show good payment history?

Thanks for the help.

[Trish]

Your best option (score-wise) would be to make sure the balance is below 50% of your credit limit and then continue to make timely payments to pay the remaining balance off. Showing consistent monthly payments is great for your credit history.

Only thing I would "worry" about would be the interest rates. Hopefully they are not too high so that you aren't paying too much on those balances.

[Canuck]

Thanks for the timely response Trish.

As I understand it with these personal loans, all of the interest is calculated up front and I'll be paying it out in full either way. There is no financial gain to paying them off now, just a FICO score gain potentially.

One is under 50% already and the other is at about 60% of the high limit mark, so they are in a good range from what you suggest.

Looking at my EQ report I see the following that makes me scratch my head.

HOUSEHOLD FINANCE
Phone Number: (800)222-6120 High Credit/Credit Limit: $0.00
Account Number: XXX...604 Payment Amount: $75.00
Association to Account: Individual account BalanceAmount: $0.00
Type of Account: Installment Past Due: Not Available
Date Opened: 2002-10 Date of Last Activity: 2007-01
Months Reviewed: Date Reported: 2009-10
Status: Bad debt, collection account or unable to locate
Payment History: No payment 30 days late
No payment 60 days late
No payment 90 days late
Prior Paying History: At least 120 days past due ( 2007-10 )
At least 120 days past due ( 2007-09 )
At least 120 days past due ( 2007-08 )
Comments: Written-off
Monthly payments

Why does the balance say 0 but the notes say written off? I plan on calling them today to inquire on this one.

How hard is it for a person to raise their credit? How fast can it happen?

Thanks again.