topic Re: Credit cards, consolidation, scoring--looking for help! in Credit Cards

Credit cards, consolidation, scoring--looking for help!

Anonymous — Sun, 06 Jan 2008 22:58:40 GMT

This is my first time posting, and I'm looking for some guidance. Specifically, I'm wondering if consolidating all or some of my credit card debts with a personal loan or LOC (such as Bank of America's "Clean Sweep") is likely to improve my credit score. I have about $30k in CC debt (racked up in law school) that I'm working to pay down ASAP. I've been shifting balances around for a few years (yes, I know that's not generally a good idea) to keep interest rates low. Here's the breakdown:

BOA $15,000 (1.9% until May)

Discover $7000 (0.9% fixed)

Chase $1500 (8.9%)

Amex $6000 (0% into until Jan '09)

Here are my current credit scores:

Experian - 688

Trans Union - 706

Equifax - 716

What do you think? Another option would be to have my wife apply for a new CC in her name only and transfer some of my balances. The reason for all of this is that we'd like to buy a house in about 6 months. I'll be the only applicant on the mortgage, since she's a homemaker and has no income. We have studen loans and an auto loan--never had a late payment or any other negative info on any account.

Any suggestions would be much appreciated--Thanks!

Re: Credit cards, consolidation, scoring--looking for help!

Anonymous — Sun, 06 Jan 2008 23:15:18 GMT

The APR on any unsecured loan is going to be higher than your current rates-

I say tighten the belt and put as much to it as you can - esp the 15K that expires in May.

Re: Credit cards, consolidation, scoring--looking for help!

Anonymous — Sun, 06 Jan 2008 23:33:32 GMT

Yeah, that's true. Thanks. The other consideration is that we're trying to get as much cash together as possible for down payment, closing costs, etc. In some ways its a balancing act between paying down debt and maximizing savings so we can close on a house.

Re: Credit cards, consolidation, scoring--looking for help!

Anonymous — Sun, 06 Jan 2008 23:55:14 GMT

This is going to be tough with out dropping this all into software (like MS Money)

Input your budget, all the accounts and payments, set up your savings goal (for the house DP and reserves) and then set up the Debt reduction planner,

Now if DTI won't mess you up- taking out a fixed loan at 12% and paying off the cards should give you a FICO boost (just guessing on your Credit limits) kicking your scores well over 720 and getting a better rate on the mortgage (this could also reduce the $ of reserves required and DP)

I don't have enough information to tell you if this would be a good move or not-

knowlejboy wrote:

Yeah, that's true. Thanks. The other consideration is that we're trying to get as much cash together as possible for down payment, closing costs, etc. In some ways its a balancing act between paying down debt and maximizing savings so we can close on a house.

Re: Credit cards, consolidation, scoring--looking for help!

Anonymous — Mon, 07 Jan 2008 00:14:16 GMT

Thanks for the suggestion. I have Money, so I'll give that a try.

As for limits, they are

BOA - $23k

Discover - $10k

Chase - $3k

Amex - $13k

I also have several cards with zero balances:

MBNA - $17k limit

Cap One - $4k

Juniper - $10k

My Equifax credit report lists my debt to credit ratio for revolving accounts at 33%. It's 95% for my installment accounts (student loans and car payment). Should I take this to mean that moving debt from the "revolving" to "installment" category won't help my score?

Re: Credit cards, consolidation, scoring--looking for help!

Anonymous — Mon, 07 Jan 2008 00:18:07 GMT

Two asides knowleg: Keep in mind that most lenders will judge you based on your *mid* score, so not to fret if one lags behind as you are trying to raise 'em all. Also, the mortgage forum on this site is excellent, there is so much to learn (and 'shane -mortgage guy' is extraordinarily helpful, amongst others). Good luck!

Re: Credit cards, consolidation, scoring--looking for help!

Anonymous — Mon, 07 Jan 2008 00:18:52 GMT

Thanks--I'll check it out.

Re: Credit cards, consolidation, scoring--looking for help!

Anonymous — Mon, 07 Jan 2008 00:20:48 GMT

Revolving credit Utilization is huge -

Getting these CC's down under 30% and 10% utl will bump your score significant-

Having less than 50% of open TL's reporting a balance is worth another 20 points.

If I were to guess you could take a 20 point hit for the INQ's and new installment acct, however you would likely gain 50 to 80 points for reducing the UTL on the revolving.

If you need any help setting up MS Money

knowlejboy wrote:

Thanks for the suggestion. I have Money, so I'll give that a try.

As for limits, they are

BOA - $23k

Discover - $10k

Chase - $3k

Amex - $13k

I also have several cards with zero balances:

MBNA - $17k limit

Cap One - $4k

Juniper - $10k

My Equifax credit report lists my debt to credit ratio for revolving accounts at 33%. It's 95% for my installment accounts (student loans and car payment). Should I take this to mean that moving debt from the "revolving" to "installment" category won't help my score?

Re: Credit cards, consolidation, scoring--looking for help!

Anonymous — Mon, 07 Jan 2008 00:26:06 GMT

@Anonymous wrote:
Thanks for the suggestion. I have Money, so I'll give that a try.
As for limits, they are
BOA - $23k
Discover - $10k
Chase - $3k
Amex - $13k
I also have several cards with zero balances:
MBNA - $17k limit
Cap One - $4k
Juniper - $10k
My Equifax credit report lists my debt to credit ratio for revolving accounts at 33%. It's 95% for my installment accounts (student loans and car payment). Should I take this to mean that moving debt from the "revolving" to "installment" category won't help my score?

Oh good, I saw this after I finished my post above. One bump you can get is to have fewer than half of you CCs reporting balances; so looks like 3 of 7. Perhaps get at least that Chase to zero balance. (htsu has posted several good examples of this with her scores, esp w/TU, and really getting hit with just one more reporting).

Re: Credit cards, consolidation, scoring--looking for help!

Anonymous — Mon, 07 Jan 2008 00:32:48 GMT

Thanks for all the help--sorry, don't completely understand what you mean by 10% utl? Sound like at least a partial consoldiation to get my debt to credit ratio below 30% and at least half my cards to zero would be a big help--is that right?

Re: Credit cards, consolidation, scoring--looking for help!

Anonymous — Mon, 07 Jan 2008 00:44:32 GMT

Yes-

UTL is revolving balances/Credit line.

Like I said- Toss this into MS money as well before you pull the trigger.

knowlejboy wrote:

Thanks for all the help--sorry, don't completely understand what you mean by 10% utl? Sound like at least a partial consoldiation to get my debt to credit ratio below 30% and at least half my cards to zero would be a big help--is that right?

Re: Bad debt on my fico

MarineVietVet — Wed, 02 Feb 2011 01:23:13 GMT

Moved to Rebuilding Your Credit

Re: Credit cards, consolidation, scoring--looking for help!

Anonymous — Wed, 18 Apr 2012 20:37:43 GMT

I have a credit scores Experian 664, Transunion 643 and Equifax 620. I have qualified for a house and am in the application process. The mortgage company asked if there was anyway I could pay off 2 finance company loans. I am trying to determine if I should increase my personal signature loan through my bank to consolildate them and lower my monthly paymentd? My interest rate would be cheaper and my term would go to 18months with no increase in my current payment. I am not sure if doing this will drag my scores down. At first I thought I could put them on my credit cards but I just paid those off and have zero balances on each of them. I have available credit of $3300 between the 2 cards and the 2 personal loans would almost max out them out. My bank loan is currently $776.52. It orignally started out at 4800 and I pay $200 a month on it and only have a few months on it. Any advice would be helpful.

Re: Credit cards, consolidation, scoring--looking for help!

Anonymous — Sat, 07 Jul 2012 05:17:16 GMT

I can only warn you about BAC.......I had a large balance....$14,000.......I paid down $11,500......within a week, they stripped me of my line of credit.....barely enough

to match what I still owe........they do not have a good reputation for treating their long term customers very well.......