BT a personal loan - how would it affect FICO?

[Anonymous]

The first stage of my credit rebuilding/debt reduction plan was getting a $5000 personal loan at 16.9% from my credit union. I am now able to pay off the $4600 balance with a BT offer from AMEX (9.9% for life).

Will paying off a personal loan (not revolving credit card) affect utilization?

Are personal loans figured into debt utilization?

Is this a wise course of action FICO-wise?

[ah32]

Not sure it's a smart way to go as far as fico scoring goes.  The loan most likely was an installment loan and the credit card, unless the limit is at least 50% above the intended usage, would affect your utilization.  I would still go the route of saving money.  As you pay down your credit card, your score will increase.  Unless, of course, you have a big purchase in mind.  I'm coming to the realization that as much as I want to increase my score, I also want to save money.  I just transferred a bunch of cards onto one card with a 0% interest rate.  It brings me just below the limit.  I don't care! The whole point of building our credit is to save money.  I plan to ask for CLI's every so often.  Hope this helps!

[Anonymous]

It may be unwise as far as your score goes, but if you don't plan on applying for anything before you can have it paid off I'd do it. Once it is paid off your FICO will rebound from the utilization hit.

[Anonymous]

Yeah, I am done applying for a while. I just got a Chase platinum visa w/$10,000 in the mail yesterday, so I think with everything else I have all the credit I need for now. I think the monetary savings will outweigh the FICO impact. Plus it should help me with the credit union, as I am now looking to refinance my car (14.8%) with them (probably below 10%).

This journey has been amazing. In April all my cards were maxed out and the lowest APR was on Sams Club at 23.15%. I have now been able to get all that debt to below 9.9% (except for this loan) and I am able to pay it much more aggressively, too. I love the FICO Forums! Thanks everybody!