Spend that windfall wisely (even if you didn't win the Powerball lottery)

4. Do I plan to buy a house soon?

Gregory Bull/AP/File
This November file photo shows a home for sale in Leucadia, Calif. If you're planning to take out a mortgage, it's a good idea to pay down your credit card debt in order to improve your FICO score.

If you are planning to apply for a mortgage, or some other large loan, it may well be smart to pay off much or all of your credit card debt. The lower your credit card balance, the lower the interest rate for that mortgage. That’s because the amount of that balance accounts for 30 percent of your FICO score.

Lenders take those scores seriously. If your credit card balances are too high, the lender may deny you a mortgage altogether.

4 of 5
You've read  of  free articles. Subscribe to continue.