@wilfra wrote:A couple years ago I had nothing but collection accounts on my report, the highlight being a $60,000 defaulted student loan. I went through the rehabilitation process and got the loans off of my report and cleaned up everything else. I got some secured cards a year ago and quickly rebuilt my credit. I'm in a good place now with $20,000 in credit and I am consistently getting approved for better and better cards with higher and higher limits.
Now the loans have been fully rehabilitated and one of them popped up on my report. It has a $2,500 balance and shows in perfect standing with no blemishes and 15 years old. That improved my credit profile drastically, namely oldest account and average age of accounts + giving me an installment loan. The impact on my score is harder to tell since I just got a bunch of cards + my utlization is high (0% APR as I don't plan to apply for any cards for awile) and so I was expecting it to drop hard -- but it instead went up 9 points. I imagine the net impact was 30-40 points positive or so.
My question is: what's going to happen when the $60,000 loan hits my report?
It's going to give me another 15 year old account in perfect standing which is great. But what about all that debt with only $20,000 in revolving credit lines? Is that going to scare lenders away? I'm praying this will be a good thing but I'm nervous I'm not going to get approvals anymore.
I don't know what will happen when the rehabilitated 60k student loan hits your report but
(a) the fact that you will have 4x as much installment debt as revolving debt is not a concern
(b) if you're concerned about your scores in the near future then you should pay down your credit cards, regardless of the 0% interest rate and
(c) since you "just got a bunch of cards" it shouldn't matter to you whether you can "get approvals anymore" because at this point you shouldn't be applying for anything anyway.
@wilfra wrote:thanks.
i'm worried about the long term, not the short term. in 6-12 months i would like to apply for another round of cards and i was considering a car loan as well. obviously at that time i'd need to get my utilization down to 1-3% or something, which i'll do.
In the long term you should be just fine, since utilization has no memory.