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New Member
Jaybraap19
Posts: 3
Registered: ‎05-10-2013
0

Should I cancel longest revolving cc with high interest?

Hey I'm fairly new to this forum and I have 2 questions-

First, I am 22 years old, applied and received a student cc through a local credit union with an $800 limit with 15%apr. I've had this card for 4 years now always making payments on time and keeping my util. Low. They canceled the student card program last year, however I am grandfathered in. With this change they sent me a letter stating that they were bumping interest up to 30%. Being this is my longest piece of credit, should I keep it and continue paying monthly Installments with a 30% apr or cancel?

Second- I have one other credit card through bestbuy with a $750 limit that is currently paid off, and two auto loans, one with a balance of $15,000 and the other $25,000. I was thinking of applying for a personal loan for $9000 through a bank to purchase a dirtbike, however I'm afraid with a score of 618 and two major auto loans currently out I will be declined and my score will drop further. I have a great job, making $60k+ a year, however I am trying to have an adequate history of installment loans for when I decide to take a mortgage out on a house in a few years.

What would you guys advise I do for either situation? Cancel cc with high interest and try for another installment loan to replace it?
Valued Contributor
p-
Posts: 2,655
Registered: ‎06-05-2008
0

Re: Should I cancel longest revolving cc with high interest?


Jaybraap19 wrote:  What would you guys advise I do for either situation? Cancel cc with high interest and try for another installment loan to replace it?

Interest rates don't matter if the balance is zero.  A good best practice is to PIF every month, and keep it open.  As far as another installment loan to improve your file...  At the low 600's you have some work to do before you can get a mortgage.  Wait on the installment loan and focus on credit repair with a goal of over 700 on all 3 cb's.  Take the money you were going to spend on teh dirt bike and put it into savings or towards paying off debt.  And spend lots of time here reading teh mortgage forum.

 

Good luck!

12-15-14: FICO EXP: 813 - EQU:802 - TRAN: 756 - AVG: 790 +240 points from JUN 2008 - MY CREDIT JOURNAL

New Member
Jaybraap19
Posts: 3
Registered: ‎05-10-2013
0

Re: Should I cancel longest revolving cc with high interest?

Thanks for the reply. I guess I should just bite the bullet and pay off my loans this year and keep paying my balance on my cards. How long do you think it would take keeping my utilization below 10% and PIF every month? 6 months?
Valued Contributor
p-
Posts: 2,655
Registered: ‎06-05-2008
0

Re: Should I cancel longest revolving cc with high interest?


Jaybraap19 wrote:
Thanks for the reply. I guess I should just bite the bullet and pay off my loans this year and keep paying my balance on my cards. How long do you think it would take keeping my utilization below 10% and PIF every month? 6 months?

Depends what else is on your reports.  Do you have lates and collections?  

12-15-14: FICO EXP: 813 - EQU:802 - TRAN: 756 - AVG: 790 +240 points from JUN 2008 - MY CREDIT JOURNAL

New Member
Jaybraap19
Posts: 3
Registered: ‎05-10-2013
0

Re: Should I cancel longest revolving cc with high interest?

One collections that is being taken off within the next 60 days due to it being a major error on a certain companies behalf. No late payments.
Valued Contributor
boomhower
Posts: 1,863
Registered: ‎09-20-2011
0

Re: Should I cancel longest revolving cc with high interest?

Once your reports clean and the utility lowered your scores will shoot up.


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