Coming into enough money to get out of all my debt. I would be able to pay off car loan, all credit cards and my personal loan.
My husband is telling me to do it in segments bc it will affect my credit score to be debt free. I would only have a mortgage left. Does this really matter? (My current score is 780)
Here’s the thing about debt: it’s not just about numbers—it’s about psychology, freedom, and what actually makes sense financially. You’re in an incredible position. Having enough money to pay off all your debt (except your mortgage) is something most people only dream about. But before you take the leap, let’s tackle a couple of key points.
Your husband is worried about your credit score dropping if you pay off your debts all at once. But let’s get real: A high credit score is a tool, not an end goal. Its sole purpose is to save you money by securing loans at better interest rates. If you’re holding onto debt just to maintain a high credit score, you’re effectively paying interest to protect a number. That’s completely backward. Why pay money to keep a score high when being debt-free would save you money in the long run?
With your current score of 780, you’re already in excellent territory. Paying off your debt might cause a small, temporary dip, but you’ll still be in great shape. And since you’ll keep your mortgage, an active credit line will remain open, keeping your credit history intact.
Debt costs you money—period. Every dollar you’re paying in interest on your car loan, credit cards, or personal loan is money you’re giving away to lenders. If you can eliminate that cost with the resources you now have, it’s a no-brainer. Imagine the financial freedom of not having to juggle those payments every month.
Here’s the real question: What’s more important to you—preserving a perfect credit score or achieving the peace of mind that comes from being nearly debt-free? If the latter matters more, paying off those debts is the clear choice. A credit score is just one financial metric. It’s useful when you’re borrowing money, but in your case, the goal is to stop borrowing money. That’s the ultimate flex.