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Is this the right thing to do?

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Regular Contributor

Is this the right thing to do?

Today I was approved for a loan that will pay off a small existing installment loan, the remaining 4 collections that are my credit report, and pay off all 3 of my credit cards and fingerhut completely.

I should take the loan, right?
Message 1 of 11
10 REPLIES
Super Contributor

Re: Is this the right thing to do?

Only you can answer this 

1) If it benefits you of course use the credit 

2) If you think the rates or it will be to costly walk away

3) Have you offered PFD's for the collections or are you just using the loan to pay in full? 

Offering PFD's may reduce the loan amount IMHO

Before you app think...
Have you done your research of the CC?
Does it fit your spending?
Do you have a plan for the bonus w/o going into debt?
Can you afford the AF?
Do you know the cards benefits? Is it worth the HP?
Message 2 of 11
Valued Contributor

Re: Is this the right thing to do?


myjourney wrote:

Only you can answer this 

1) If it benefits you of course use the credit 

2) If you think the rates or it will be to costly walk away

3) Have you offered PFD's for the collections or are you just using the loan to pay in full? 

Offering PFD's may reduce the loan amount IMHO


4) Can you resist the urge to get back into the same trouble?


   3/12 $3500     6/12 $1200      10/12 $1500   12/12 $3400    6/13 $12000      7/13 $5000      7/13 $2500       8/13 $2000    8/13 $6000

  | CSP (AU) $12,000 | Amex PRG (AU) | United $6,000 | OCCU $12,000 | Ink Bold | GM $3,200 | DCU $7500 | Luthansa $9000 | SPG $6,000 | Citi AA Executive $11,000 | Ink Plus $5,000                                                                         | EX 2/7 697 | EQ 10/27 721 | TU 12/15 719 |

Message 3 of 11
Valued Contributor

Re: Is this the right thing to do?

would the loan end up saving you more than it cost you?

Message 4 of 11
Regular Contributor

Re: Is this the right thing to do?

Yes to all of the questions.. The small installment loan that I will be paying off is more monthly than the new loan (granted I will obviously be paying on it longer than the original loan. I plan on doing pfd with the collections and actually emailed 2 of them today and mailed a letter regarding the other two.

I was mainly worried about the DTI making my score drop a bit but I think getting the cards, collections, and small installment loan paid off is enough of a benefit to go for it
Message 5 of 11
Moderator

Re: Is this the right thing to do?


earlyKY wrote:
Today I was approved for a loan that will pay off a small existing installment loan, the remaining 4 collections that are my credit report, and pay off all 3 of my credit cards and fingerhut completely.

I should take the loan, right?

It would decrease your AAoA, but you'd definitely see improvement with UTIL.   If the loan has a better APR than the CCs and other TLs, it would probably make financial sense.



Start: 619 (TU08, 9/2013) | Current: 791 (TU08, 12/1/17)
Sam's Club MC $25000 | Marvel MC $25000 | Macy's AMEX $25000 | AMEX BCE $20400 | Discover IT $20000 | Macy's Store $20000 | Cap 1 QS WMC $17250 | BoA BBR #1 $17200 | JCP $15000 | Citi DC $12600 | Freedom VS $12000 | BofA BBR #2 $11800 | Disney VS $11500 | Care Credit MC $11200 | Cash+ VS $10500 | CashForward WMC $10000 | Barclay Rewards WMC $10000 | WCU Visa $10000 | Amazon Store $8000 | Blispay $7500 | Target MC $5000 | Sony Card $4250 | ~~Gardening Since 11/2/17
Message 6 of 11
Regular Contributor

Re: Is this the right thing to do?

See the AAoA is something I still haven't figured out. My credit history is 12 years long, but I'm assuming AAoA only counts the items that are currently reporting. Does it count closed accounts? Charged off accounts? AAoA confuses me lol!
Message 7 of 11
Valued Contributor

Re: Is this the right thing to do?

With FICO, positive closed accounts count toward AAoA for up to 10 years, depending on whether the original creditor continues to report them that long. Negative closed accounts stay on a shorter time. One thing that makes it confusing is that some FAKO score sites, mainly Credit Karma, don't count closed accounts, but real scores do include them.

 

Message 8 of 11
Epic Contributor

Re: Is this the right thing to do?

Yes, all OC accounts, open, closed, good or bad are factored into your AAoA.

 

ETA:  For clarification, positive closed accounts stay up to 10 years from the date closed and will factor into AAoA.  Negatives, like a CO are reported until the CRTP is reached and will factor in until that time.  If the CO annotation is removed the account will become positve and stay for up to 10 years from the date closed.  Otherwise, it will be removed at the end of the CRTP.

 

It has to be on your CR to be counted for anything.

 

Message 9 of 11
Regular Contributor

Re: Is this the right thing to do?

So... I have a positive tradeline from an old installment account from 2004. I'm assuming it will fall off in 2014 thus dropping my AAoA?
Message 10 of 11