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Consolidate CC with Personal Loan or HELOC??

Established Contributor

Consolidate CC with Personal Loan or HELOC??

Which will give me a bigger bump in scores? Paying off CC debt with a personal loan or HELOC? I get that the HELOC will have a lower interest rate.

What has been your experience?

Thanks in advance.
Penfed Platinum Sig Visa $33k, PenFed PLOC $25k, NFCU Cash VISA Sig 22k, NFCU Visa Flagship 22k, CAP1 Venture $23k, CAP1 Venture One $15k, NFCU NAV Check $15k, Barclays Arrival $13,2k, DCU VISA 5k, Cap1 QS 7.5k, WF Finance 3.5k, Merrick 2.2k, Barclays Apple Financing 6.1k BestBuy 5k >Ch7 BK filed 8/09; DC 01/10 EQ 636 Nov 13;
EQ08 718 | TU 731 | EXP 728
Inqs: EQ 11, TU 8, EXP 11(last 2 yrs)
Goal 750+ In the Garden til

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Community Leader
Legendary Contributor

Re: Consolidate CC with Personal Loan or HELOC??

A HELOC is revolving credit, and is (normally) included under your revolving % util.

If the percent util is high, it could affect your % util scoring, whereas if scored as a loan, it would not.

 

I say "normally" because FICO does treat a HELOC of approx $35K or above as an installment account, and thus does not include it in your revolving % util.

So it kinda depends upon how big your HELOC is, and how long before you intend to get the util down......

Message 2 of 6
Established Contributor

Re: Consolidate CC with Personal Loan or HELOC??


RobertEG wrote:

A HELOC is revolving credit, and is (normally) included under your revolving % util.

If the percent util is high, it could affect your % util scoring, whereas if scored as a loan, it would not.

 

I say "normally" because FICO does treat a HELOC of approx $35K or above as an installment account, and thus does not include it in your revolving % util.

So it kinda depends upon how big your HELOC is, and how long before you intend to get the util down......


Thanks Robert - my HELOC is $64k.  I have used approx $15k so far but was wondering if my scores would benefit more if I got a personal loan to pay off some CC balances or use HELOC....

Penfed Platinum Sig Visa $33k, PenFed PLOC $25k, NFCU Cash VISA Sig 22k, NFCU Visa Flagship 22k, CAP1 Venture $23k, CAP1 Venture One $15k, NFCU NAV Check $15k, Barclays Arrival $13,2k, DCU VISA 5k, Cap1 QS 7.5k, WF Finance 3.5k, Merrick 2.2k, Barclays Apple Financing 6.1k BestBuy 5k >Ch7 BK filed 8/09; DC 01/10 EQ 636 Nov 13;
EQ08 718 | TU 731 | EXP 728
Inqs: EQ 11, TU 8, EXP 11(last 2 yrs)
Goal 750+ In the Garden til

Message 3 of 6
Community Leader
Legendary Contributor

Re: Consolidate CC with Personal Loan or HELOC??

Do the calcualtion of your % util with and without the HELOC, and that will tell you if it is being included in your % util.

Installment loans do not have a % util, they have a % current balance of original loan amount.  While that is a factor in scoring, it has a very small weighting compared to % util of revolving credit.  Thus, removing a high % util from your revolving scoring and shifting the balance over to installment scoring will result in a lowered % util with the resulting scoring under installment being negligible.

Message 4 of 6
Established Contributor

Re: Consolidate CC with Personal Loan or HELOC??

Thanks Robert - EX includes in Revolving separate from Installment loan and RE Loans - and the Util% is 20% including the HELOC in Revolving
Penfed Platinum Sig Visa $33k, PenFed PLOC $25k, NFCU Cash VISA Sig 22k, NFCU Visa Flagship 22k, CAP1 Venture $23k, CAP1 Venture One $15k, NFCU NAV Check $15k, Barclays Arrival $13,2k, DCU VISA 5k, Cap1 QS 7.5k, WF Finance 3.5k, Merrick 2.2k, Barclays Apple Financing 6.1k BestBuy 5k >Ch7 BK filed 8/09; DC 01/10 EQ 636 Nov 13;
EQ08 718 | TU 731 | EXP 728
Inqs: EQ 11, TU 8, EXP 11(last 2 yrs)
Goal 750+ In the Garden til

Message 5 of 6
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Established Contributor

Re: Consolidate CC with Personal Loan or HELOC??

Will have to buy the MYFico product to see if they show differently....would they should differently?
Penfed Platinum Sig Visa $33k, PenFed PLOC $25k, NFCU Cash VISA Sig 22k, NFCU Visa Flagship 22k, CAP1 Venture $23k, CAP1 Venture One $15k, NFCU NAV Check $15k, Barclays Arrival $13,2k, DCU VISA 5k, Cap1 QS 7.5k, WF Finance 3.5k, Merrick 2.2k, Barclays Apple Financing 6.1k BestBuy 5k >Ch7 BK filed 8/09; DC 01/10 EQ 636 Nov 13;
EQ08 718 | TU 731 | EXP 728
Inqs: EQ 11, TU 8, EXP 11(last 2 yrs)
Goal 750+ In the Garden til

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