brundog

Will this Hurt Your Credit Score??

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It is said that you should not turn unsecured debt into secured debt, which is what this would do. If you need to do this still, then what you would do is (thanks KB shared this info) this:

Don't pay any of the cc's totally off. You want to leave 50 or so on it. Then pay that off over the next few months on your own. If you do it this way, it should not look too bad for you. When the loan hits your reports you scores should go down a bit, but once you have paid down the balance of this and the other cards, the score should even out and even go up a few points.

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I have another way to answer this. Keep your flexibilty. If you can pay extra on a card, great-do it. If you can only pay the minimum, then you can do that also. If you get a second, you HAVE to pay a possible higher payment everymonth. And if you don't pay-something happens, you could loose you home.

The other thing is that 2nd's are substationally more risky for the investor/lender. So they charge a MUCH higher rate of interest. and your credit scores have to be higher than with regular - even sub prime loans.

Oh yes, what kind of rate? The "piggyback seconds" that I do-which are the 80/20 loans, those seconds can be as high as 13.99, and never lower than 10.99.

So, great idea, but please don't do it.

Charles

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So actually if you look at both samples in what Sis & Charles provided - then the best possible situation out of the 2 is a mix, stay with paying credit cards, but get a better rate card (to partial balance transfer) and pay down the debt that way. If you can Leap Frog from one permotional card to the next. You would be doing good to go this route.

The only draw back to this, is all the accounts you are opening; over time, instead of focusing so much on longer established relationships; but the savings to be gained my be worth it in the end.

LOL, could not help the leap frog reference. :p

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My husband and I took out a home equity line of credit (we took this out so we can make an offer on a new house, if we ever find the right house for us, without a contingency of selling our house). Once this hit our credit reports, our scores made a HUGE jump, by about 50 points. I think the reason for this is that the equity line reports like a credit card, so it makes our utilization look great. This is an adjustable interest rate of 3.99%

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Laura66 yea, them equity lines can do both good & bad (being reported as revolving) because if you already have too many credit cards - that is one more which you did not need. Have alot of people complain about the way these are reported, most times people already do have too many cards.

I would think the difference in score jump would of been the balance transfer seeing all other revolving accounts go from over utilization to zero in no time, If you equity line was big to begain with then the balance transfered over would not of been so bad / just depends on how much of the new credit was utilited.

Have jumped over 50 points myself before, but it was due to balance transfer & utilitzaiton part of things.

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