increase my credit score idea

[Anonymous]

Hi, I'm about to do a short sale which will hit my score between 50 to 100 points. My score is 728 now. I need to come to closing with 10k. I'm already about 7% on all my credit card cards. I was thinking about getting a line of credit of 50k while my credit is still good, take 5k from that so that I can keep it under 10 percent and skim a little out of every one of my credit cards for the other 5k. So that way I'll stay under 10% out of all my credit limits. So hopefully, worst case scenario after the short sale, my score will be between 628 and 675, is this a good idea?

usaims

[Anonymous]

Why is the score so important for you?

Do you have already the $50k credit line or are you looking for one?

Any point loss that you incur due to high utilization can be recovered rapidly, if you pay the balance down, and there is no long-term penalty for that.

So, it depends on your future plans.

[Anonymous]

I need to keep a good credit profile because of my job. I don't have the 50k credit limit yet, thinking about applying for it. By the way, If my score drop 50 to 100 points due to a 'short sale' of a house, how long will

it take to recover that if I pay everything on time and keep the credit limit low and paid?

[Anonymous]

No Collateral means no line of credit, especially right now in this market.

You can't be fired for having your credit score drop.

[recoverychick]

You can if you're in certain positions and levels within the financial industry.

[Anonymous]

Indeed! If you can be denied a job/raise/position due to your credit score you can in fact loose your job due to your credit score. Especially if you work in an at will state. Your boss can fire you for wearing the wrong color socks if they wanted to.

But seriously you are most likely NOT going to loose your job JUST because your credit score drops. The only reason your credit score factors into your ability to do your job (as explained to me by someone from the FBI) - people with low credit scores "typically" have high amounts of debt and would be more likely to accept a bribe, commit fraud or steal out of desperation.

Edited to add: If you already have the job and you have already proven to be of a high moral character a small credit score drop shouldn't trigger any red flags with your employer. Everyone makes mistakes sometimes.

I'm definitely not a credit expert... I have mistakes, mess ups and mayhem on my credit report.

But can I share my opinion...... Is your credit score really going to be your biggest concern in this situation? Is it REALLY your highest priority right now?? I mean seems like there are so many other factors to consider.... Maybe I misread this but did you say you were going to take out a FIFTY THOUSAND DOLLAR loan.... But only use $5000 of it and the rest of the $10k that you need (another $5000) you were going to borrow from your credit cards (Not just one but several)?

Credit and Debt are different things and more of one doesn't always  make less of the other...

If it were me I am DEFINITELY not taking out a $50,000 loan if I don't need it ( You really meant $50K with 4 zeros and not $5K with 3 zeros.... Im so confused) What are you going to do if you really do loose your job because of your credit situation or for any other reason for that matter and then you don't have a way to pay back the $50K loan???????

I'm sorry this all sounds really REALLY negative and I don't mean anything against you personally but borrowing $50K to only use $5K of it seems really, REALLY excessive. That HAD to be a typo!

Message Edited by AmyBoo on 10-10-2008 11:35 PM

[Anonymous]

What I meant is take out a line of credit of 50K, but only use 5 or 10k of it so that I can stay about 10% of my credit line limit. I have heard that if you keep the balances of the credit limit about 10%, one won't get hit with a lower score.

[Junejer]

I believe that the magic number for LOCs to be treated as installment is $50K too. So, it won't count in your revolving balance anyway.

[Anonymous]

so you are telling me that a heloc or a line of credit is not like a credit card? If I take out a LOC for 20k and use 15k, it won't hit my fico hard?

usaims

[Anonymous]

It is treated as a revolving account under a certain figure, around 35-40k. Anything above that and it is treated as an installment loan. In your scenario it would count as revolving and you would have very high utility on that account and possibly overall. You would need a much larger HELOC to have a neutral scoring impact.

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usaims wrote:

so you are telling me that a heloc or a line of credit is not like a credit card? If I take out a LOC for 20k and use 15k, it won't hit my fico hard?

usaims

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