Should I pay off installments - is it helping score?

Score 620 TU and 640 EQ ..





Score pulled while CC were maxed. Now paid off in full and waiting for report to update to see new score





Salary 44000


2 credit card 1 $200 limit 1 $500 limit.


1 loan 4500/5000 payment 220


1 loan 7700/10000 payment 330





All negative credit items have been paid off years ago but are still on there which is why the scores are low. No lates in the past year 1 30 day the year before that...nothing I can do now aside from wait for the negatives to fall off. The worst is 1 student loan default (now paid) but still showing all the 120 day late history. Many loans paid with no lates. Car/Consolidation etc..





My rent currently is $740, lease is up in March ..rent will go up at that time, which is why I am looking now. I also have a person to move into new house. My family is willing to help with the purchase of the home (which I want to keep as little as possible) I'm guessing will be between 10-20 thousand for downpayment/closing costs etc... hopefully less.





Option 1) Consolidate those 2 loans into 1 for a combined payment of 340ish but what will that do to my score since it will be a new loan when I apply for mortgage??





Option 2) Pay off one or both of those loans prior to purchasing and have less money for a deposit. That will show only $700? available credit on report - How badly will this hurt score?





I'm not sure what kind of a deposit I'll have to put down so I'm leary about changing anything on my report and making things worse ...any ideas??|||A credit score changes about every 12 months. Also if you're halfway through on the 2 loans, you paid about 70% of the interest. That's how most banks make their money. When consumers refi their loans, all they're doing is paying add'l interest|||You need to get in touch with a loan officer, and tell them your situation. Keep in mind, they only make money if you close on a house, so they want you to buy one as bad as you do.





In the mean time, just make your monthly payments, don't do anything drastic. With any extra money you have don't bother paying it to your debts, put it into savings. Check your local state/city for down payment assistance programs...they vary based on your personal situation and salary (also ask your loan officer about this).|||Paying off the installments will not increase your score that much. It is the negatives that are dragging you down. You do not qualify for a mortgage until those scores increase, about this time next year.


Start saving for a down payment. You need down payment and another 6k for closing costs. Ideal if you have at least 30k in savings plus you need your emergency savings of 8 month living expenses.


It is not your gross salary that counts but your take home pay.