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| *Loan,banking and credit>>>debt loan |
If I consolidate debt with a Home-Equity loan will it improve my credit score? |
I have just spent a substantial amount of money on a remodel, mostly with a credit card. I am worried it will affect my credit score, so I want to know what I can do. Paying it off within, say, 24 months isn't an option. As long as your total debt to credit limit ratio stays below 30% your scores shouldnt drop. If you have used more than 30% of your total available credit then you should consider a home equity line. By taking out a new line of credit and paying off the other debt, you have reduced your overall debt to credit limit ratio. In addition the Home equity line may be tax deductible, so there may be an added benefit. This is a good option. I did it a couple of years ago and it lowered my monthly payment and I get to write off the interest on my taxes. As far as your score is concerned, it really should not make any difference because all you are doing is transferring your debt from one place to another. Just be sure not to make the laon for longer than 60-months. Finance Manager for over 7-years. You may be able to to roll it into your 1st mortgage without the cash-out hit if you have receipts for the work done. This will be cheaper over the long run as the rate you will be repaying is lower than you credit card and tax deductible. Your credit card if close to the max will affect your score as this is viewed as bad use of revolving credit. What you are planning is a good idea....just be careful of the fees the charge you. But one major warning. Over the past few years home equity loans have been very popular for people trying to consolidate debts. But what they end up doing is run up their old credit cards again. Now they are in twice the amount of debt, risk losing their home and up filing for bankruptcy. I've seen this happen many times. You need to get a firm grip on your credit spending to make sure it doesn't happen to you. But to answer your question, generally it will have a bad effect to your credit score because you are adding more credit limit to your history. But there are other factors involved....and in your case I don't think any negative effect will last long. Just keep making your payments and watch your credit spending and you will be in great shape. Hello Everyone, My name is Mr Paul Walters and i am a private money lender that renders financial assistance to those in need of loans at an interest rate of 3% thus if you are in dire need of a loan, contact us via paulwalters12@yahoo.com NOTE: THIS OFFER IS OPENED TO ALL!!! |
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