if i take out a loan to consolidate my credit cards, will that hurt my credit. I was told that if you have credit cards that are over 50% of the balance, than that drags down your score. I just want to consolidate so I don't have that problem
2006-09-25 18:01:03 · 7 answers · asked by greenwald 3 in Business & Finance ➔ Credit
the reason I want to do this is so it looks better on my credit. the reason for that is I really need to refi my mortgage. My interest rate is outrageous. I then intend to pay off the loan when I get my income tax return. It should be large b/c of the interest on the house, interest on student loans, daycare and my husband and I both claimed 0.
2006-09-25 18:18:22 · update #1
Articles about consolidation:
http://www.freewebs.com/infosource100/consolidation.html
About credit score:
http://www.affiliatetier.com
2006-09-26 06:15:23 · answer #1 · answered by Anonymous · 0⤊ 0⤋
If you have enough equity in your home, you should pay down or off your credit cards with the money you get from the refi. The interest rate will be better too! Rates for refis areas low as they've been in the last 4 years. The interest you pay on a mortgage or Line of credit on your home will not only be reasonable but is tax deductible. You win all the way around. If you want more info, I can help you or contact a mortgage loan broker for suggestions. He/She can evaluate your financial situation and recommend ways to achieve your goals.
2006-09-26 02:17:24 · answer #2 · answered by Debbie P 2 · 0⤊ 0⤋
No, you shouldn't do it but not because of what you are afraid of doing to your credit score. Most (including myself) have fallen for the trap to take a loan or equity line (since it is tax deductable) to consolidate credit cards. In theory this makes sense...at least the equity line for the tax breaks on consumer credit. But in reality, most run into issues later and charge some back on those credit cards so they end up with a loan and payments to credit cards.
Just be honest and ask yourself why you would want to consolidate in the first place? Usually it is for a good interest rate or tax break but the reality is that you have racked up some debt already on these credit cards so you must be using them. The likelyhood of you not using them after the loan is not that great. I am not judging you, I and many many have done the same thing.
My advise would be to try to pay off the smallest balance first with everything you could afford while paying the minimums on the others. Once you have paid one off, then use that money to go after the next lowest one (the snowball effect).
Remember, you could only relieve yourself of debt by not incurring anymore while you are trying to pay off what you have.
Good Luck!!
2006-09-26 01:14:53 · answer #3 · answered by Runner Runner 3 · 0⤊ 0⤋
Consolidation 101
http://www.affiliatetier.com/Debt_Cons_101.php
A Guide To Debt Consolidation
http://www.affiliatetier.com/A_Guide_to_Debt_Cons.php
A Guide To Free Debt Consolidation
http://www.affiliatetier.com/A_Guide_to_Free_Debt_Cons.php
How your credit is scored:
http://www.affiliatetier.com
2006-09-26 04:56:03 · answer #4 · answered by Anonymous · 0⤊ 0⤋
Whatever you do, don't go to a finance company for the loan. THOSE companies hurt your credit scores. Try a credit union for the loan.
go to www.LearnAboutCredit.com
2006-09-29 03:20:35 · answer #5 · answered by supercreditguru 3 · 0⤊ 0⤋
no, it wont hurt your cr rating
Online Debt Consolidation
http://www.complete-debt-info.com/category/Online-Debt-Consolidation.html
2006-09-26 07:55:28 · answer #6 · answered by Anonymous · 0⤊ 0⤋
you should try our credit repair program, and we can help you http://rstinson.bettercreditpro.com
2006-09-26 01:38:23 · answer #7 · answered by Anonymous · 0⤊ 0⤋