Personal Loan Reduce Ratio?

[Anonymous]

Hello - I wanted to see if I'm thinking about this scenario correctly. In the last year I've managed to get my credit score up about 100 points, to 694. I'll admit that over the last year I've opened several new credit cards to try to increase overall credit limit, as I've got a card that is almost maxed at $16k. All my other cc's are paid off, but my usage ratio is still at 44%.

If I could get a personal loan for a couple % points lower in interest, and paid off that one card...would me usage ratio drop and improve my credit score..... Or does just moving the debt around not do anything for me? I'm on the path to start making large payments towards this debt ($800-$1000 per month) very soon.

Thoughts?

Thank you!!

[Anonymous]

Yes it would help your score a lot.  But is there any particular reason you need your score to go up a lot on the next six months?  For example are you about to buy a house?  If not, I would just focus on paying the credit card down the straightforward way.  When you get your total utilization to under 28.9% and your individual utilization to under 68.9% you'd be much better situated to getting a good rate on a personal loan for the CC payoff. Even then, only do that if you have a clear plan for how you will (moving forward) only use your credit cards for occasional very small purchases (i.e. a bad of groceries or a tank of gas).

[Anonymous]

Thank you so much - that really brings clarity to the situation, and makes perfect sense. No real need to bump credit score (just that now I think I'm nearly addicted to watching that score go up lol)...thank you for bringing common sense to the table, and helping me see how to best approach this debt payoff.