From reading these forums I know the types of credit are as important as balances and utilization so I need to know from the experts how this may impact my scores so I don't shoot myself in the foot.
I have decent scores (707EQ myfico /737 TU my fico /799 EX (lender pull 6/13).
Here is the scenario:
- I recently traded in a car I was purchasing and decided to lease instead - personal preference to break some old ties. I"m ok with this choice, and I don't think it hurt my scores any, or not so far.
- I have a consolidation loan from a finance company from 2004 with a 11k balance and a 23.99 (i think) interest rate. I know, sucks...it's before I joined myfico and learned all the valuable lessons from the forums!!! I'm not ok with this choice and want to get rid of it.
- I have about 65K worth of credit in my major credit cards - balance owed is 4700 across 3 accounts, the rest have zero balances. I'm ok with this choice, I'm keeping overall utilization below 9% and making sure there are zero balances on at least two of the cards at all times.
Should I:
App for a HELOC for 40k-45k. (I refinanced my house a few months ago for a lower interest rate and WF rep tried to get me to get the HELOC then, but I wasn't really interested, but after thinking about it it may be the best way to get rid of the loan from the finance company???)
WF already told me the HELOC will be reported as a revolving account. So will paying off the finance company installment loan and getting another revolving account mess up my scores because of the "mix" of credit isn't good?
Also, showing an 11K balance for a 40K HELOC is about 29% utilization...will this hurt my scores also??
Your credit mix won't change as long as the installment loan stays on your report as "closed".
In my opinion, if this will save you money (make sure to look into fees to ensure that it does actually make financial sense) then it is worth it. It shouldn't affect your score as much as it will help your wallet.
In my opinion, if this will save you money (make sure to look into fees to ensure that it does actually make financial sense) then it is worth it. It shouldn't affect your score as much as it will help your wallet.
Thanks NewtoCredit80 and SnackTrader. I am going to see if WF will do a SP since I already have established accounts with them. I hope my scores will still be ok since the lease should show up as still having an installment credit account. Just tired of paying the interest on the loan with the finance company, it's just ridiculous!