Will a personal loan (unsecured loan) used to payoff cc's improve my score?

[Anonymous]

I found a website today www.prosper.com that offers personal loans for various reasons.  The site seems to be on the up and up.  It is somehow tied in such that it reports to your credit report though.  So my question is:  If you have a personal loan for ~$14k on my report (paid over 3 yrs), is that better for my score than the 7 different cc's with the same total balance?  Just looking for opportunities to both consolidate and increase my score. 

thanks

jayray

[Anonymous]

It would make sense to me if your score went up because you're revolving debt would go down. I glanced at the prosper.com website and it looks like a neat idea but I don't trust it and the rate look very high, thats just my own personal opinion.

[fused]

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Jayray7352 wrote:

I found a website today www.prosper.com that offers personal loans for various reasons.  The site seems to be on the up and up.  It is somehow tied in such that it reports to your credit report though.  So my question is:  If you have a personal loan for ~$14k on my report (paid over 3 yrs), is that better for my score than the 7 different cc's with the same total balance?  Just looking for opportunities to both consolidate and increase my score. 

thanks

jayray

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Maybe yes! What are the CLs and balances on each CC? As for the loan, what interest rate are we looking at? FYI, Prosper uses Vantage Scoring and not FICO.

[Anonymous]

Fused- Thanks for the response.....my cc's look something like this:

Limit/Balance

Bank One $5,000.00/$3,463.83 Discover  $3,500.00/$2,856.72  Citbank $5,100.00 /$5,093.42 Discover  $5,000.00/ $3,332.45 Chase $5,000.00/ $ 500.00 FireStone  $750.00 / $   202.99

It may look like there is a little room in there for consolidation just within the cards...but most of them have been closed.  We tried credit counseling a few years back and got completely hammered when the Credit Counselor decided to keep the first months payment as a fee....brutal, but true. 

Thanks for any advice.

jayray

[fused]

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Jayray7352 wrote:

Fused- Thanks for the response.....my cc's look something like this:

Limit/Balance

Bank One $5,000.00/$3,463.83 Discover  $3,500.00/$2,856.72  Citbank $5,100.00 /$5,093.42 Discover  $5,000.00/ $3,332.45 Chase $5,000.00/ $ 500.00 FireStone  $750.00 / $   202.99

It may look like there is a little room in there for consolidation just within the cards...but most of them have been closed.  We tried credit counseling a few years back and got completely hammered when the Credit Counselor decided to keep the first months payment as a fee....brutal, but true. 

Thanks for any advice.

jayray

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If you can afford the monthly payments on this loan and the interest rate is reasonable, I say go for it. Your cumulative util is 63% and you have a maxed-out Citi card (95% util on a CC is considered maxed-out). Your first task is to pay down this card, maxed-out and over-the-limit CCs tank FICO scores BIG time. For max FICO points have all of your revolving accounts reporting util of 1-9% of your CLs. Here's how FICO scoring and util% calculations work (I believe the numbers are close, but remember YMMV).

Pay all of your CCs to:

< 50% util, a bump in scores

< 30% more improvement

  1-9% cruise control

Just curious, do you know all three of your FICO scores?

Message Edited by fused111 on 08-15-2007 11:27 AM

[Anonymous]

I found a website today www.prosper.com that offers personal loans for various reasons.  The site seems to be on the up and up.  It is somehow tied in such that it reports to your credit report though.  So my question is:  If you have a personal loan for ~$14k on my report (paid over 3 yrs), is that better for my score than the 7 different cc's with the same total balance?  Just looking for opportunities to both consolidate and increase my score. 

thanks

jayray

I used prosper.com just for that purpose, and my credit scores jumped  20 points.  My loan was for $5,950, at 14% (yes that's high), for three years.  However, the budget plan I had set up to pay off the credit cards at $500/month was going to take 7 years.  With prosper.com, however,  I am now only paying $204.08/month, and will be done with it in 3!

The key to making it really work is in your hands though -- park those cards!!

Be sure to read the forums on prosper.com to find out how to write a solid request.  There's plenty of information, and don't be discouraged if you don't get approved the first time.