Don't use an external for scratch if you can avoid it. You always get the best performance with scratch on the system drive. An external will work if appropriately formatted, but it's a suboptimal solution.
If you have less than 50GB free on your system drive, you should do some housecleaning anyway. A normal configuration of operating system and a standard range of applications should take up less than 100GB. Anything more than that is most likely junk building up in your user account. Clean it out. Use Disk Inventory X or something similar.