Will my credit score increase?

[Anonymous]

I posted a little while ago and got a lot of great responses about consolidating vs. snowballing etc. Thanks to everyone for your help! I decided to list a loan on prosper for $8000 (about 45% of my total credit card debt)at 18%. This would go to paying off 3 out of 4 CCs with balances as follows: 1390/1500/30.9% 3400/4000/26.99% 1132/3000/24.4% The remaining $2058 will go toward the 4th card: 10804/14000/24.65% This would leave my total bankcard usage at 8746/25000, including other credit cards with $0 balance. The loan is currently 25% funded with a few days left in the listing. If fully funded, I am curious if a. this loan is a smart move and b. if it will improve my credit score. I understand I would still have the debt, but it would then be in the form of an installment loan rather than credit card. Is this better? Please let me know if you're interested in seeing my prosper listing and/or if you know someone who may be interested in lending. I would be happy to send you the link. My current TU fico score is 645. I do not know EX and EQ.

[Anonymous]

sorry, didn't check the html box, here's a more manageable post:

I posted a little while ago and got a lot of great responses about consolidating vs. snowballing etc. Thanks to everyone for your help!

I decided to list a loan on prosper for $8000 (about 45% of my total credit card debt)at 18%.

This would go to paying off 3 out of 4 CCs with balances as follows:
1390/1500/30.9%
3400/4000/26.99%
1132/3000/24.4%

The remaining $2058 will go toward the 4th card:
10804/14000/24.65%

This would leave my total bankcard usage at 8746/25000, including other credit cards with $0 balance.

The loan is currently 25% funded with a few days left in the listing. If fully funded, I am curious if a. this loan is a smart move and b. if it will improve my credit score.

I understand I would still have the debt, but it would then be in the form of an installment loan rather than credit card. Is this better?

Please let me know if you're interested in seeing my prosper listing and/or if you know someone who may be interested in lending. I would be happy to send you the link. My current TU fico score is 645. I do not know EX and EQ.

[Anonymous]

as an added note:

these reasons for my scores are listed as follows for each of the CRA:

-Not enough revolving debt experience.
-The balances on your bankcard accounts are too high in comparison with your credit limits.
-There are too many personal finance accounts on your credit report.

[PayYouNever]

It's doubtful you score will increase immediately, because your just playing 3-Card Monte with your debt by taking out the loan.

Also, your APRs are way too high. Get those reduced, if you haven't missed a payment in over six months, it's quite easy to get an APR reduction. Even with poor credit (I have a TU 547, EQ 516) and I was able to get AMEX to reduce my Delta card from 29.99% to 18%. And my orchard and firt premiere, which had been at the penalty APR of 29.99%, dropped down to 9.99% with 3 consecutive months of paying.

The reason why I say this is, with APRs in the mid to high 20s, your debt doubles in about 2.5 years. By reducing the APR, you'll have a lower minimum payment, which means that the more money you throw at the debt, the more is used to decrease principle, not interest.

Your overall indebtedness isn't going to change by getting a loan, just how you owe and at what interest rate. Decreasing your CC balances, however, will boost your score.

[Anonymous]

Thank you for your response. How did you request the APR decrease? Phone? Writing? Do you simply ask or did you say something like, "I've been a loyal customer..."

Thanks!

[Takunda1]

Just call and ask. YOu might want to say you don't want to default on the cards but the high APR is straining you finances. If they say no the first time, call back and escalate. The higher up you go the better your chances to get a reduction. I got a reduction from 21.99% to 12.74%.

[Anonymous]

I agree. I think the loan is a bad idea you are just moving your debt around. The lower your debt to credit ratio is on each card the better off your credit score will get. I suggest paying more on the cards and forget the loan.

[Anonymous]

I would love to just pay more to the cards. However, I am a graduate student right now and have very limited funds. I'm only able to pay slightly above the minimums. That's why I was seeking to get a loan with a lower interest rate, so more of my current payments would go toward the principal.

I am certainly going to call them all and try to get my APR reduced. I didn't think they would do that when you have a high balance, so I never tried. Thanks so much for the tip!

[PayYouNever]

Make sure that you get a supervisor or higher on the phone when you're explaining your situation (being in grad. school) to help get the APR reduced. If, for example, you're at 24.99% and can get it reduced to 12.5%, then the monthly finance charge is reduced and therefore the minimum payment might be reduced such that even if you're only able to contribute another $5 month, you're bringing the balance that much faster.