I currently have 3k debt on about 7 credit cards.. 2 year credit history.. a couple inquiries. Not looking so good.
Score simulator says my score can be 730+ if i paid off debt.. 3 cards are maxed..
Im in the market for an auto loan.. but i want to know if i get a 3k loan to consolidate debt... dropping utilization of all credit cards to 0%
would that essentially get me in a good credit range for high approval as well as APR?
Idk if installment loans are counted as debt/credit ratio..
*I can afford to pay off the debt on my own.. but i NEED a car now.. for work. and it would be pointless applying and getting approved with a crazy 20% interest rate.. because of bad credit due to high balances. ANY ADVICE IS APPRECIATED.
********Would a bank give me a lower rate just becsue i have a have a high score? Even if i have inquires and an installment loan?******
@user5387 wrote:Moving credit card debt to an installment loan will in general raise your scores, especially if some of the cards are maxed out.
Interest rates on loans are often set based on credit scores.
You're awesome. Thanks a lot. Im getting the loan from One main financial (considered to be consumer fiannce) Do you think it will have THAT much of a bad effect on my score?
@krielly wrote:I got a really BIG increase in score consolidating my cards to a personal loan. http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/89-Point-Increase/td-p/3023996
That being said, it was also a pretty good rate on the unsecured loan.
I would suggest however letting a small amount report on one card (less than 10%) rather than paying to 0% for your optimum score.
Gotcha, makes sense. The amount of cards reporting balances is calculated into your score as well. Maybe i'll keep just one card with a balance on it. Does that make sense?