@llecs wrote:Your CCs won't know where the money came from. They'd view it as a large payment, if that's what you are doing. You'd see a hit for the new loan, but that will be trumped in a big way by the improvement in utilization. You should see a nice increase. I did the same over a year ago...and ditto, reverse the habits that got you there. It's easy to fall back again.
Where did you get your loan?
Consolidation loans can be a great way to pay down your debt. Instead of several CC bills, you have one installment bill and the interest rate is usually much lower than what you pay on most credit cards. The utilization rate on your CCs drops to O% which helps your scores and as you pay your installment loan it helps your payment history, which in the long term can help raise your FICO scores too.
Once your credit cards are consolidated, you have to consider them to just be debit cards. If they are rewards cards, you can earn a bunch of extra money or get merchandise without spending more than you can pay off within a month. I balanced transferred all my credit card debt onto one card at 0% interest and I've earned $200 worth of rewards without interest payments over the past six months because I stayed within my means.
Bad Advice (no offense). You don't want ANY statements on your credit reports indicating you had to go to counseling to manage credit. Who would give you a loan then? I completed consumer credit counseling back in my early 20's and years later, when buying a new car and when talking to a lender about mortgage, was told by both that these are looked upon as badly as a bankruptcy. Maybe FICO doesn't score it like a bk, but it looks BAD.
My friend was in a debt management program through a reputable Consumer Credit Counseling Service (CCCS). He had no problem getting an auto loan for a new car with a competitive rate.
