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Regular Contributor
earlyKY
Posts: 173
Registered: ‎09-10-2013
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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?
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Senior Contributor
myjourney
Posts: 26,659
Registered: ‎02-07-2013
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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

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Valued Contributor
wHiTeSoL
Posts: 1,063
Registered: ‎07-09-2013
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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?


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Valued Contributor
juggalo9er
Posts: 1,569
Registered: ‎10-24-2013
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Re: Is this the right thing to do?

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

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Regular Contributor
earlyKY
Posts: 173
Registered: ‎09-10-2013
0

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
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Senior Contributor
SunriseEarth
Posts: 4,558
Registered: ‎08-12-2013
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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.


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Regular Contributor
earlyKY
Posts: 173
Registered: ‎09-10-2013
0

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!
Valued Contributor
Gunnar419
Posts: 1,190
Registered: ‎01-23-2013
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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.

 

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guiness56
Posts: 22,406
Registered: ‎01-17-2008
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Re: Is this the right thing to do?

[ Edited ]

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.

 

Regular Contributor
earlyKY
Posts: 173
Registered: ‎09-10-2013
0

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?

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