credit unions and offers to pay off cc balance at lower interest rate

[Camilion]

Today I spoke to my local Credit Union...Very Nice Lady...as soo informative and helpful We talked about options and things they could do for me. Very nice car loan information ....and services Nice credit card limits that would be easy to get Nice checking and savings plan easy access and location She told me about a plan that...would pay my highest credit card balance off at a MUCH lower interest rate.... My question is..IF i decide to take them up on that offer....they pay off my high interest CC I pay a much lower monthly payment.. BUT HOW will this effect my FICO score. I hear that I should have a mix of credit .... AT this time i ONLY have and HAVE always ONLY had CC accounts I've NEVER had a car loan NOR a mortgage... Will this NEW kind of credit HELP me or Hurt me?? Thank you@! **huggles*** Just to make things a little clearer...I do not have high uti..about 2% total across the board.....Only this one card has a balance on it and only because i did BTs a while back with the 0 intrest for 6 months.... Soo its NOT necessary or nor do i have any problem paying it... I just wanted to know IF it might help my scores to have a different mix of credit types...My scores are about 700 plus or minus a few either way across the board

Message Edited by Camilion on 06-16-2008 09:54 PM

[aftermath]

Yes. Mix is definitely good, and will help increase your score overtime. You will also receive a handsome score increase when your CC is paid in full.

[Anonymous]

Camilion,

You need to find out whether it will financially benefit you a lot or not. If not I would just wait for the next large purchase you might require financing to pick up an installment loan. You must mix FICO sense with financial sense. If you do get the loan you can pay off most of it right away then dribble out the rest of the payments to avoid interest but to keep the installment loan on your report for mix.

[marty56]

Make sure they dont close the old accounts.  Also I dont know what your score will do if you have 3 CCCs at 9% util converted to one account at 27% util.  I know total util will be lower but I am still not sure about the FICO affect of having an account at 27% with total util say at 9%.

I will know in about a week or 2 when my util goes from 3% to 1% with a CCC going from 11% to 1%.

[haulingthescoreup]

I got a little confused there between where you said you would have a much lower rate, and then where you talked about a 0% BT.

As the others said, yes, it's helpful to have an installment loan in your mix, but I wouldn't open one solely to please the FICO gods by improving credit mix. If it saves you money to open it, great; otherwise, keep in mind that it's available should you need it in the future. And as marty said, if you do move any balances around, keep the original card open.