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Should I transfer an Installment Loan balance to an HELOC??

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Valued Member

Should I transfer an Installment Loan balance to an HELOC??

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??

 



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Frequent Contributor

Re: Should I transfer an Installment Loan balance to an HELOC??

Even if it affects ur score,the savings are huge. Once you pay off your loan your credit would better.


PNC Secured 2000 (Dec12), Chase Amazon 2000 (Apr13), CapOne Newcomer 2500 (May13), Citi dividend 3000 (May13), Discover IT 1000 (Jul13), Amex BCP 6000 (Jul13), Chase Southwest 10000 (Jul13), Chase Marriott 12000 (Oct 13), BofA Travel Rewards 5000 (Dec13)

- In garden till Dec 2014
Message 2 of 4
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Valued Contributor

Re: Should I transfer an Installment Loan balance to an HELOC??

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 Wallet: Amex BCP (12/12) $50,000, Chase Freedom (12/12) $16,500, Cap1 Quicksilver (6/12) $14,000, Barclaycard Rewards (5/13) $10,500, Citi Prestige (4/16) $30,000

Last App: June 27, 2015
Message 3 of 4
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Valued Member

Re: Should I transfer an Installment Loan balance to an HELOC??

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!



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