Personal Loan to Boost Credit Score
Hello Terry,
I am really in a pinch right now. I have some outstanding balances on my credit cards and am only making the minimum payments. My credit card debt is hovering around $4100. I was wondering if taking a personal loan out would help improve my situation and credit score? I use Credit Karma and I see that I have an “outstanding” chance to get an offer from such companies as Upstart. Should I go for one of these offers? Are these loan companies, such as Upstart, reputable? What personal loan companies would you recommend?
I need to find a new rental to live in and I’m afraid that my credit score might be too low when they do a credit check.
Please help with suggestions.
Terry Says
A loan is a loan — and the amount of your outstanding loans has a huge impact on your credit score. l You said you went to CreditKarma, which I highly recommend and do myself. But only to check my score, not to respond to loan offers!
People who do take those loan offers often regret it — because they once again charge up their cards, and are in deeper trouble!
So what was your credit score. I hope it was over 720. That’s likely what it will take to rent an apartment in a nice area.
You asked for suggestions and here is my best one. Call the National Foundation for Credit Counseling at 800-388-2227. They are a trusted non-profit, and you will be connected to the nearest member agency. You can trust their advice.
And here’s a secret. If you take the current minimum payment on each card, double it– write that amount down– and pay that SAME amount every month, you will pay off your balances in less than 3 years — assuming you don’t charge another penny! Otherwise it could take you 30 years to pay them off! That is the debt trap that keeps you losing ground each month.
The ONLY way to improve your credit score is to PAY DOWN THE BALANCES!!!
