How will this affect my scores

shirleyland · ‎10-25-2008

I have about 20,000 in CC debt( multiple cards), my scores are Eq 701, TU 676, EX 656. Here goes the projected plans: plan 1, take 10,000 from saving and pay half of debt off or plan 2, get a personal loan for 10,000 and pay half of debt off. Which of these plan will boost my credit score the most. I don't have any personal loans (installment) on my CR.

dallasjetfan · ‎10-25-2008

Not sure which one would be better for scores, but wouldn't it be better to just use your savings? Why borrow more debt to pay debt?

shirleyland · ‎10-25-2008

To have a mix of credit, my main concerned is boosting my scores.

chekz · ‎10-25-2008

have you used the score simulator thats included in a power report? It gives you an idea of what it would do. I was 2200 in dept and i paid it off in 2 months. My score jumped from 628 to 745. But thats because i kept carrying that balance over and just paying min balance.

llecs · ‎10-25-2008

I don't think it would help your score that much (getting a loan by improving the mix of credit). Now you'll get a nice bump paying down the debt. I would look at the cost of getting a loan to payoff debt. Unless your rate is less than your interest rate on your savings, it'll cost you. You'd have to figure that. Would you be willing to pay $x to get a minimal increase for improving the mix?

Anonymous · ‎10-26-2008

If you do go the route of taking from your savings, please leave a little cushion for emergencies. I know some people empty savings to pay off CCs thinking they can use the CCs if they need to, but with the way credit card companies are slashing credit limits.. well, I wouldn't want to count on it.

If you go the route of a personal loan.. Have you taken care of the issues that caused the debt in the first place? I've heard of so many people that move the debt only to find themselves running up the credit cards again. So if it was just overspending, you might want to get it in check before taking out the loan. If it was a one time emergency, make sure you have a hefty emergency fund.

Just some more stuff to chew on before you make a move..