Is Consolidation the Answer?

[Anonymous]

I have 10700 in credit card debt. My credit card utilization is at 80%. I have no derragatory marks on my credit score. The reason I am considering consolidating is because I am planning on opening a business which requires a down payment for a business loan, which is why I would like to shovel the majority of my income into savings instead of credit cards. I have done those score simulators that say my score will drastically go up if I pay off my credit card, curious if consolidating would have the same affect. Any insight would be much appreciated.

[NRB525]

With debt consolidation loans, you usually get just more than the balance you want to cover. So you would still see fairly high utilization on that loan. Overall utilization percentage may drop, which can help scores some.

Can you list out the cards you have, CL on each, the balance on the card, and current interest rate. If a promo rate, when does that expire, and what does the rare go to? With $10k, it may be best to pay down, shuffle some balances if possible.

[RonM21]

Welcome Op1. NRB525 has it correct about how this could play out. But once you list more info, folks can give you a more direct opinion on what would be helpful to you. At first glance, I think a consolidating loan might be a good idea for you, but that is without knowing more of the details.

[pizzaman1]

How much of a credit score decrease will you see if someone takes out a personal loan to consolidate the credit card debt. I just took out a loan paid off all my cards without thinking how much the loan will affect my credit score

[Anonymous]

I have $10,757.94 on a cc with a max of 12,500. 0 on another card with a max of 1,100. And 0 on another one with a max of $700. Interest rate on the cc with a balance is 18%. The interest rate on the consolidation was around 24. The reason I am considering is to raise my credit score while allowing myself to save up more money.

[Anonymous]

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@Anonymous wrote:
I have $10,757.94 on a cc with a max of 12,500. 0 on another card with a max of 1,100. And 0 on another one with a max of $700. Interest rate on the cc with a balance is 18%. The interest rate on the consolidation was around 24. The reason I am considering is to raise my credit score while allowing myself to save up more money.

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18% vs 24% doesn't sound like a good deal. You may see a small boost in score, but you'll still have a balance that you will pay more in interest on. Basically spending money on a few score points. Personally, I wouldn't do it, considering your card has the lower interest rate.