Will this hurt more than help?

[FlaDude]

Moving balances from cards to loans can help quite a bit. I've raised my FICOs around 80-90 points in the past year by doing that and also moving some of my balance to a BT card in my wife's name. As others have mentioned, timing is the real issue here. Ideally, you would have done this a year ago instead of on the cusp of getting a mortgage, but hindsight, etc.

I'm not sure about loans, but new credit cards usually take a month or two to show up on the report so from strictly a credit score standpoint you will likely see the score gain from lowering the cc balance long before any score penalty from the loan. Mortgage lenders of course look beyond just the scores, and will see the inquiry even if the loan is not yet on your report and want more details.

[KLEXH25]

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@FlaDude wrote:

Moving balances from cards to loans can help quite a bit. I've raised my FICOs around 80-90 points in the past year by doing that and also moving some of my balance to a BT card in my wife's name. As others have mentioned, timing is the real issue here. Ideally, you would have done this a year ago instead of on the cusp of getting a mortgage, but hindsight, etc.

I'm not sure about loans, but new credit cards usually take a month or two to show up on the report so from strictly a credit score standpoint you will likely see the score gain from lowering the cc balance long before any score penalty from the loan. Mortgage lenders of course look beyond just the scores, and will see the inquiry even if the loan is not yet on your report and want more details.

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+10

I also asked my SO about his debt consolidation loan and he said there was a quick jump in his scores when all the CC balances reported $0. The cards were paid off within a day of getting the loan. So if it's soley from a score perspective alone, yes I think you will see an immediate score increase. Just make sure that the loan will not require you to close out any of your cards or that any of your card issuers will decide to close the account once the debt is paid.

[Rwil72]

Thanks for the advice. I am going for it, because I only need 10 points with the cards being maxed out. I can only assume that the positive of the cards showing all zero and one at 8% will outweigh the negative of the new loan.

[FlaDude]

Good luck, and please report back to let us know how it goes.

[HeavenOhio]

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@Rwil72 wrote:

Thank you for your advice, but I have to respecfuly disagree with you on both points. First when you state

it can't be done quickly. I Know the card reports on the 3rd. If all my cards show under 10% There will be a change

in my score on the 4th if my credit is pulled. I disagree with your second point about not being allowed to open new

debt for 12 months before applying. I know that to be false, mortgage companies don't like it but if your DTI stays

under the requirements it wouldnt be a problem. The only question at hand is will the points gained from the cards being paid off

be negated by the points loss from opening a new installment account?

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The reason we suggest 12 months of gardening before a mortgage is to allow the potential borrower's AoYA to reach a year, which tends to result in a nice bonus. Also, any inquiries will become unscorable over that time.