topic Re: CC Revolving vs. Installment in Credit Cards

CC Revolving vs. Installment

Anonymous — Sat, 23 Feb 2008 20:09:44 GMT

would switching all CC debt over to a secured installment loan (debt consolidation through CU) be a huge boost to FICO score or is it looked upon as just moving it around and maybe lower the score further?

Re: CC Revolving vs. Installment

Anonymous — Sat, 23 Feb 2008 20:14:13 GMT

Score wise yes this will help if it reduces your UTL-

Also need to NOT run the cards back up-

I advise people to NOT move debt from unsecured to secured unless they know exacly what they are doing-

bewildered wrote:

would switching all CC debt over to a secured installment loan (debt consolidation through CU) be a huge boost to FICO score or is it looked upon as just moving it around and maybe lower the score further?

Re: CC Revolving vs. Installment

Anonymous — Sat, 23 Feb 2008 20:19:43 GMT

thanks, believe me I learned my lessen. what did I show for the CC debt? not much, nice vacations and visited nice restaurants....all over rated. now I want to have something of my own, condo/townhouse. scores are good, but the debt is a huge monkey.

Re: CC Revolving vs. Installment

rubaty — Sat, 23 Feb 2008 20:19:48 GMT

I got a consolidation loan through First Command last year and my scores went up by almost 75 points on every CRA! What you need to do is make sure that you have the discipline to not create new debt. I did the consolidation so that I could make a fresh start and you can look at my sig line to see the results.

Re: CC Revolving vs. Installment

Anonymous — Sat, 23 Feb 2008 20:25:50 GMT

rubaty, you said it, fresh start and now somewhat wiser!

Re: CC Revolving vs. Installment

haulingthescoreup — Sat, 23 Feb 2008 20:26:00 GMT

Hi, bewildered, welcome to the forums! You don't sound that bewildered now.

As the others said, this is a great solution for your scores, as long as you have the self-discipline not to incur new debt. It would be pretty awful a year from now to have the CC balances back up where they are, plus a loan to pay on.

The one thing to realize if that if you app for any other credit, lenders will know in a New York minute exactly what you have done, and the improved scores won't help a bit. But once that debt gets paid down, you'll be in great shape all around, especially since you'll probably get a lower rate on the loan than you have on the cards. That's good financial sense, to me.

You've just got to be really, really honest with yourself.

Re: CC Revolving vs. Installment

rubaty — Sat, 23 Feb 2008 20:33:47 GMT

haulingthescoreup wrote:

The one thing to realize if that if you app for any other credit, lenders will know in a New York minute exactly what you have done, and the improved scores won't help a bit. But once that debt gets paid down, you'll be in great shape all around, especially since you'll probably get a lower rate on the loan than you have on the cards. That's good financial sense, to me.

You've just got to be really, really honest with yourself.

HTSU...I don't think that the lenders will really know since it shows as an installment acct. The 9 new cards I got gave me a total of $80K in new TL's to put me over $100K. They just want to see good scores and a good payment history.

Re: CC Revolving vs. Installment

Anonymous — Sat, 23 Feb 2008 20:46:43 GMT

it's been a daunting trip from my beginnings as a bewildered individual...I attempted to do the mortgage thing early last year....that was true bewilderment. Took a hard look at my situation and became realistic, boy did I. while I was getting by with just "good" scores, I knew they could be way better. Applying for new credit is null, I have 5 revolving accounts, BOA with the highest CL of 19.5k, now they are cleared and they will stay that way. if an emergency arises, I will be able to handle with what I currently have.

thanks to all for your input, it's encouraging and motivating to keep the course.

Re: CC Revolving vs. Installment

haulingthescoreup — Sat, 23 Feb 2008 22:00:32 GMT

@rubaty wrote:

HTSU...I don't think that the lenders will really know since it shows as an installment acct. The 9 new cards I got gave me a total of $80K in new TL's to put me over $100K. They just want to see good scores and a good payment history.

Thanks, you said that better than I did. What I was trying to say is that the total debt will still be viewable to sharp-eyed lenders. But it's true, since it's over on the installment side, it should raise fewer alarms about debt pyramiding.

As a new PenFed member who just did a BT, I'm a bit twitchy on the pyramid thing!