Ratio is currently 15% which is highest it's been due to helping my daughter & Xmas. I have been using various rewards cards such as Discover Miles, Savor One & a rewards Visa from my credit union. I have been paying off every month but that will not happen this month. Should I accept the low interest loan from my credit union? They say I am pre approved so no inquiry but we all know it will register as a new trade line on my report. OR just pay it over time? Someone said the mix...as I have cards and a car loan...having a personal loan would help.
Any thoughts anyone?
Starting Score: 621
While it is true that the "Credit Mix" is maximized by having some sort of installment debt reporting, you seem to have that already covered with your auto loan.
You'll take a small hit for the new account initially which will eventually level out once the trade line is seasoned and your utilization goes down. As for whether it's a good idea? That's depends on a multitude of factors only you can answer. (Do you need extended time? Are the Cc payments/interest currently too high? Is it just a utilization issue?)
I, for one, am not at all against playing around from time to time. In the past I've taken out car loans just so I could have that Penfed check in my hand because it makes it SO much easier to close at a dealer. Makes future approvals with my preferred lenders MUCH easier in my experience. Lots to consider.
After giving debt consolidation some serious thought I went ahead and got a personal loan. My scores are similar to yours so I'm hoping they'll go up once my utilization, which is around 45% now, is down to AZEO and the loan starts getting paid off. I took into consideration that it would be at least two years, maybe three to pay everything off. I am making almost twenty payments a month and don't want to risk being late or missing one even though I haven't in over six years. The interest on the loan, while high, is still less than almost all my credit cards. The interest I am currently paying almost makes my loan payment, and this loan will cut my total outlay by at least half. I'm wanting to get a mortgage in a couple years so I'm cleaning up my profile and this will give me time to save a little more money as well. So, for me, it made sense, not to mention the relief of not having all this on my shoulders almost everyday, every month. Of course, we're all in different situations so YMMV.
Peace
Good plan.
@sarchin wrote:After giving debt consolidation some serious thought I went ahead and got a personal loan. My scores are similar to yours so I'm hoping they'll go up once my utilization, which is around 45% now, is down to AZEO and the loan starts getting paid off. I took into consideration that it would be at least two years, maybe three to pay everything off. I am making almost twenty payments a month and don't want to risk being late or missing one even though I haven't in over six years. The interest on the loan, while high, is still less than almost all my credit cards. The interest I am currently paying almost makes my loan payment, and this loan will cut my total outlay by at least half. I'm wanting to get a mortgage in a couple years so I'm cleaning up my profile and this will give me time to save a little more money as well. So, for me, it made sense, not to mention the relief of not having all this on my shoulders almost everyday, every month. Of course, we're all in different situations so YMMV.
Peace
Excellent, glad you got it all worked out! 👍
@Dhani76 wrote:Ratio is currently 15% which is highest it's been due to helping my daughter & Xmas. I have been using various rewards cards such as Discover Miles, Savor One & a rewards Visa from my credit union. I have been paying off every month but that will not happen this month. Should I accept the low interest loan from my credit union? They say I am pre approved so no inquiry but we all know it will register as a new trade line on my report. OR just pay it over time? Someone said the mix...as I have cards and a car loan...having a personal loan would help.
Any thoughts anyone?
1. My advice would be just pay over time.
2. I don't think adding a loan will do anything positive for your score.
