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If I consolidate some high interest loans (which would drop my monthly payment by $200), how would that affect an auto loan in the near-future? (Like within 3 months of getting the consol. loan)
I'm sure the lower monthly payment obligations would look better, BUT would it raise a red flag that I recently opened a new loan?
@rross wrote:If I consolidate some high interest loans (which would drop my monthly payment by $200), how would that affect an auto loan in the near-future? (Like within 3 months of getting the consol. loan)
I'm sure the lower monthly payment obligations would look better, BUT would it raise a red flag that I recently opened a new loan?
It will lower your DTI ratio, thereby increasing the amount you can be loaned, however the new loan will lower your AAoA and decrease your credit score.
@rross wrote:If I consolidate some high interest loans (which would drop my monthly payment by $200), how would that affect an auto loan in the near-future? (Like within 3 months of getting the consol. loan)
I'm sure the lower monthly payment obligations would look better, BUT would it raise a red flag that I recently opened a new loan?
Also you need to be careful in terms of how the loans are affecting your revolving utilization. Are they reporting as installment loans or revolving ? You don't want to drastically increase your revolving utilization as it could negatively impact your FICO score.
Also need to know what your scores are at, what kind of loans are being consolidated, where you're getting the consolidation loan, etc.
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