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Bal xfr, or personal loan

FancyPants1
Member

Bal xfr, or personal loan

Hello all,

 

I have $4500 credit between 4 cc. I recently relocated for a new job and have used $1100. 

My utilization will not report until the end of June. (I always report 3 to 4%) in attempt to bring my utilization down in advance (1st paycheck not until end of July)

 

Would it be better to apply for a new cc and balance transfer or take personal loan with credit union I have one of my cc with?

 

Thanks

Message 1 of 8
7 REPLIES 7
tcbofade
Super Contributor

Re: Bal xfr, or personal loan

If it were me, I'd go for a nice zero percent for x months BT card.  Bank of America, Wells Fargo, Discover... and take my time paying it off.

 

A personal loan isn't a bad idea, but the interest rate will be more than zero.

 

Good luck!



08/01/22 Fico 8: EX 752, EQ 767, TU 763.
08/03/22 Fico 9: EX 744, EQ 755, TU No idea.

Zero percent financing is where the devil lives...
Message 2 of 8
SouthJamaica
Mega Contributor

Re: Bal xfr, or personal loan


@FancyPants1 wrote:

Hello all,

 

I have $4500 credit between 4 cc. I recently relocated for a new job and have used $1100. 

My utilization will not report until the end of June. (I always report 3 to 4%) in attempt to bring my utilization down in advance (1st paycheck not until end of July)

 

Would it be better to apply for a new cc and balance transfer or take personal loan with credit union I have one of my cc with?

 

Thanks


IMHO it would be better to do neither.  It would be better to take a small hit in your scores and just weather it.

 

If you apply for a new credit card you'll have a hard inquiry, you'll be resetting your age of newest account, lowering your average age of accounts, and adding another account with balance.

 

If you apply for a loan you'll have a hard inquiry, you'll be resetting your age of newest account, lowering your average age of accounts, adding another account with balance, and adding an installment loan which has a high proportion of balance to loan amount.


Total revolving limits 699000 (597000 reporting) FICO 8: EQ 732 TU 721 EX 698

Message 3 of 8
FancyPants1
Member

Re: Bal xfr, or personal loan

Thank You

Message 4 of 8
FancyPants1
Member

Re: Bal xfr, or personal loan

All true. 

This will be my 1st time reporting high utilization, considering trended data will now be included w Fico I was working to avoid it.

 

What's an average point drop for high utilization?

 

The other 3 cards will only report 3%

The $1100 card avail credit is $1800

Message 5 of 8
SouthJamaica
Mega Contributor

Re: Bal xfr, or personal loan


@FancyPants1 wrote:

All true. 

This will be my 1st time reporting high utilization, considering trended data will now be included w Fico I was working to avoid it.

 

What's an average point drop for high utilization?

 

The other 3 cards will only report 3%

The $1100 card avail credit is $1800


If $1100 reports, I would imagine you'll lose 20 points or so, but  you'll get them all back when you pay it back down. To minimize the loss try to spread your spending over the other 3 cards.

 

The "trended" data only applies to 1 scoring model which no one is using now anyway. Besides, it won't be a trend in your case, it will just be a temporary blip on the screen.

 

If you decide to do something I think you should go with the balance transfer rather than the loan.  See if your credit union has a non-rewards platinum card with no balance transfer fee, and use that. I don't think you should incur a balance transfer fee over this.


Total revolving limits 699000 (597000 reporting) FICO 8: EQ 732 TU 721 EX 698

Message 6 of 8
FancyPants1
Member

Re: Bal xfr, or personal loan

Thank you! I wanted to wait a full year before applying for any other cards but considered applying early if less points loss w new cc, as you pointed out it will affect credit age, and another inquiry so I'll take the hit one time w utilization.

 

I have Navy federal cc that has bal xfr option but it would still report high utilization even after considering the current cl.

 

Thank you and everyone who replied for the great feedback!

Message 7 of 8
SouthJamaica
Mega Contributor

Re: Bal xfr, or personal loan


@FancyPants1 wrote:

Thank you! I wanted to wait a full year before applying for any other cards but considered applying early if less points loss w new cc, as you pointed out it will affect credit age, and another inquiry so I'll take the hit one time w utilization.

 

I have Navy federal cc that has bal xfr option but it would still report high utilization even after considering the current cl.

 

Thank you and everyone who replied for the great feedback!


Good decision. And congratulations on the new job.


Total revolving limits 699000 (597000 reporting) FICO 8: EQ 732 TU 721 EX 698

Message 8 of 8
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