I have 40,000 in Credit Card debt. I own my house outright. If I get a Home Equity Loan and move this credit from my cards to the HELOC will it improve my credit score or will it basically stay the same?
2007-10-16 08:21:58 · 6 answers · asked by xblaine 1 in Business & Finance ➔ Credit
Without preaching or telling you ow to live your life, I will simply answer your question.
Yes it will increase your score because all of your debt to credit ratio being lowered to 0. This makes up a full 30% of your score.
I did this a couple of years ago and my payments are lower, my score went up a lot and I get to write off the interest I pay to the bank now, so it's a win, win, win.
2007-10-16 09:03:23 · answer #1 · answered by ? 7 · 1⤊ 0⤋
How much you owe versus the balance counts for 30% of your credit score. However the new account will count towards 10% of your score.
So if you get a home equity line and have a full balance it might be better to stick with your credit cards.
Unless you're paying 20% in interest.
2007-10-16 10:33:44 · answer #2 · answered by Shazam365 1 · 0⤊ 0⤋
Well it might improve your score. Your debt to available credit ratio would drop.
But moving credit card debt to your house is a bad idea. People who do this usually end up with those credit cards charged full again.
You should re-think your spending habits. Only charge on those credti cards what you can afford to pay in full every month.
2007-10-16 08:28:30 · answer #3 · answered by bdancer222 7 · 0⤊ 1⤋
It may not raise it greatly because you will still have the same debt, but a home equity line would allow you lower monthly payments, and a lower interest rate. Both of which could help you pay more towards your debt and pay it off sooner and that would help your credit score.
2007-10-16 08:28:52 · answer #4 · answered by lepr0kan 5 · 0⤊ 2⤋
I suggest that you do it. But you must follow these conditions. For each item that you put on the loan, you must shred the card. In addition, you must use cash on those items that you really don't need.
Keep one card only for gas and emergencies. Preferably a card that gives rebates.
Oh and yes, the interest on the equity line is tax deductible, so that is the reason why I say you should do it.
2007-10-16 08:32:49 · answer #5 · answered by Steveo 5 · 0⤊ 2⤋
suggest a visit to daveramsey.com to learn the hard lessons u'll see coming to u from others mistakes.
are u finished with the credit slave cards?
2007-10-16 08:31:19 · answer #6 · answered by Anonymous · 0⤊ 2⤋