Want to get consolidated loan from a friend to pay off debt - how will it affect my FICO?

[nickeypoo72]

My credit history in a nutshell - currently have 2 cc (accounts closed by creditor because I WAS in credit counseling) and 1 charge off that is in collections with LVNV/Resurgent/PRS.  Balances are 1600, 900, and 4200 respectively.  I am pretty sure I could borrow the money from a friend and make payments to him and get all this debt cleared up (which I would love to do because I'm tired of all the phone calls from CA and creditors.)  I could pay off the friend in 2 years.  I used the FICO score simulator to see how it would improve my score doing this action and it only increase my score by 20 points (581 to 601).  If I took the two years and paid the balances down instead, it increased my score by nearly 50 points.  My goal is to purchase a home next year sometime, and wish to increase my credit score in hopes of getting a home loan.  This is so mind boggling, I just want to pay my debts off and buy a house and live happily ever after! 

Would it help if I obtained another line of credit and made monthly payments on that account to increase my credit score?  I hate to do that, as I don't want to fall in the same mess I did before with debt on my credit cards..

Just looking for some credible positive advice.  )  THANK YOU!

[Anonymous]

Before you open any new accounts , I would handle the old one's first.  If your friend can loan you the money to pay off your debts and not put him or herself in a bind then I would go that route. BUT......

Borrowing money from friends and family can cause a lot of problems, so make sure that you can pay them back like you promised. You don't want to lose a friend or family member over MONEY !

However the positive side to borrowing the money from your friend, it will allow you to get rid of the creditors and save money by not paying a lot of intrest , if any at all. Your credit reports will be able to start the healing process as well...........Good Luck