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How will this scenario effect my credit rating?
Old 02-09-2006, 02:12 PM   #1
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How will this scenario effect my credit rating?

My husband and I just received an offer from our credit card company for a 0% interest rate for the life of the loan on balance transfers to this card.* The card has a limit of $22,000 and currently is paid off every month.* I was considering transferring our home equity line of credit, which is currently at Prime minus 1% and totals $23,500.* I would transfer $22,000 of it, leaving the remaining $1,500 there for the time being.* The credit card company charges about 1.5% of the total amount on a monthly basis.* I was, however, wondering how this would effect our credit score.* Does anyone have any idea, or know where I can get this information?
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Re: How will this scenario effect my credit rating?
Old 02-09-2006, 02:23 PM   #2
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Re: How will this scenario effect my credit rating?

Quote:
Originally Posted by Cheapo Marx
My husband and I just received an offer from our credit card company for a 0% interest rate for the life of the loan on balance transfers to this card.* The card has a limit of $22,000 and currently is paid off every month.* I was considering transferring our home equity line of credit, which is currently at Prime minus 1% and totals $23,500.* I would transfer $22,000 of it, leaving the remaining $1,500 there for the time being.* The credit card company charges about 1.5% of the total amount on a monthly basis.* I was, however, wondering how this would effect our credit score.* Does anyone have any idea, or know where I can get this information?
My guess is no effect, given the info you supplied.

JG
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Re: How will this scenario effect my credit rating?
Old 02-09-2006, 03:11 PM   #3
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Re: How will this scenario effect my credit rating?

Is it a Discover card? They usually have a "2 purchases per month" requirement to keep 0% for life of loan. The purchase amounts accrue interest at the regular high APR.
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Re: How will this scenario effect my credit rating?
Old 02-09-2006, 03:16 PM   #4
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Re: How will this scenario effect my credit rating?

Actually its a Mastercard.* The offer didn't mention a monthly purchase minimum, however I'll be sure and ask.* Thanks for your response.
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Re: How will this scenario effect my credit rating?
Old 02-09-2006, 03:22 PM   #5
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Re: How will this scenario effect my credit rating?

Quote:
Originally Posted by justin
Is it a Discover card?* They usually have a "2 purchases per month" requirement to keep 0% for life of loan.* The purchase amounts accrue interest at the regular high APR.*
Slightly off topic.......these -0-/1.99% deals seem to have dried up for me. I still have over 100K "workin" for me but would like to fill in the "holes" as I pay off the balances when the promos stop. Anyone else seen a dropoff in deals?

JG
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Re: How will this scenario effect my credit rating?
Old 02-09-2006, 03:26 PM   #6
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Re: How will this scenario effect my credit rating?

Citicards has about 12 different credit card offers with 12 months of 0% balance transfer offers. I'm planning on an "app-o-rama" this weekend.
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Re: How will this scenario effect my credit rating?
Old 02-09-2006, 03:28 PM   #7
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Re: How will this scenario effect my credit rating?

Quote:
Originally Posted by justin
Citicards has about 12 different credit card offers with 12 months of 0% balance transfer offers.* I'm planning on an "app-o-rama" this weekend.*
Thanks. I may try this also, although I am batting way under .500 recently.
They usually say I have adequate credit already or insufficient income. Can't
really argue with either position.

JG
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Re: How will this scenario effect my credit rating?
Old 02-09-2006, 03:42 PM   #8
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Re: How will this scenario effect my credit rating?

I think it will have an effect on your credit score. All sorts of things effect your score. The number of cards you have the available credit, the number of times your credit has been checked. Even canceling cards. Try this link

http://www.thinkglink.com/article.as...ds.htm&ID=1251
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Re: How will this scenario effect my credit rating?
Old 02-09-2006, 04:37 PM   #9
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Re: How will this scenario effect my credit rating?

Quote:
Originally Posted by Cheapo Marx
I was considering transferring our home equity line of credit, which is currently at Prime minus 1% and totals $23,500.* I would transfer $22,000 of it, leaving the remaining $1,500 there for the time being.* The credit card company charges about 1.5% of the total amount on a monthly basis.* I was, however, wondering how this would effect our credit score.* Does anyone have any idea, or know where I can get this information?
affect

Anyways, I suspect it would harm your credit score- both your HELOC and CC are (usually) "revolving accounts" as far as your report is concerned. If you did transfer $22k to the CC, one of those lines would be maxed out- this is what makes it harmful to your score. Unless you plan on financing something in the near future, why do you care about your score at all?
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Re: How will this scenario effect my credit rating?
Old 02-09-2006, 04:46 PM   #10
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Re: How will this scenario effect my credit rating?

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Originally Posted by MRGALT2U
My guess is no effect, given the info you supplied.
Then you would have guessed wrong!

Applying for credit puts a "hard inquiry" on your credit report, which if you have several of in a short time period, could reduce your credit score by up to 10% for a period of time. *Not a huge impact.

A heloc also counts as a mortgage, which is excluded from a lot of credit scoring algorithms unsecured debt calculations, whereas your transfer to a credit card would definitely be counted as unsecured debt. *Usually credit scoring algorithms dont count available unused credit to be a problem, but look at the percent used vs percent available as a factor.

I think on its own, this might drop your score a little bit. *No big worry if your score is good, and you arent planning on applying for a mortgage, one of the sub 3% 'best credit only' car loans from the manufacturers finance company, or some other high end purchase where you get a benefit by being at the pinnacle of credit scoring.

If you apply for 2-3 more cards in the next month or two though, you could get dinged a little more.
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Re: How will this scenario effect my credit rating?
Old 02-09-2006, 07:55 PM   #11
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Re: How will this scenario effect my credit rating?

Quote:
Originally Posted by Marshac
Unless you plan on financing something in the near future, why do you care about your score at all?
Actually...a lot of things, including you car insurance and house insurance (and maybe other things) get cheaper the better your credit rating (and the converse is true as well, lower the score, more expensive things get)...so it usually does pay to keep your score high if you can. On my policies/bills from the ins company it states right on their that I am getting a better rate because of my credit score.
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Re: How will this scenario effect my credit rating?
Old 02-09-2006, 08:18 PM   #12
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Re: How will this scenario effect my credit rating?

Quote:
Originally Posted by farmerEd
Actually...a lot of things, including you car insurance and house insurance (and maybe other things) get cheaper the better your credit rating (and the converse is true as well, lower the score, more expensive things get)...so it usually does pay to keep your score high if you can. On my policies/bills from the ins company it states right on their that I am getting a better rate because of my credit score.
Sure, but it doesn't readjust every month. I know Pemco pulls my report every Aug, so I make sure I don't use my CC much in July. I really don't know what number they use though- I do know it's not a FICO however.
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Re: How will this scenario effect my credit rating?
Old 02-09-2006, 10:43 PM   #13
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Re: How will this scenario effect my credit rating?

My opinion is that the credit score mania was created to sell products to consumers. :P
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Re: How will this scenario effect my credit rating?
Old 02-10-2006, 08:34 AM   #14
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Re: How will this scenario effect my credit rating?

I've seen that lately some companies are pulling interviewees FICO scores and avoiding people with really bad credit.

Apparently theres some correlation between a low credit score, poor levels of responsibility, and high crime levels.

Seems to make some sense.
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Re: How will this scenario effect my credit rating?
Old 02-10-2006, 10:46 AM   #15
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Re: How will this scenario effect my credit rating?

Quote:
Originally Posted by (Cute Fuzzy Bunny)
Apparently theres some correlation between a low credit score, poor levels of responsibility, and high crime levels.
If you can't manage your own FICO then it's debatable whether you can add value to a company's profits...
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Re: How will this scenario effect my credit rating?
Old 02-10-2006, 10:56 AM   #16
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Re: How will this scenario effect my credit rating?

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Originally Posted by Nords
If you can't manage your own FICO then it's debatable whether you can add value to a company's profits...
Yep. A few years back the CFO at the company I retired from had his Mercedes reposessed. The repo man had duplicate keys and drove it right out of underground parking while several employees watched thinking "It must be nice to have someone from the dealership pick up your car and service it for you."

The CFO tried to cover by saying it had been stolen. Once the truth got out he was gone within a few days. Imagine what a confidence builder THAT was to company employees.

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Re: How will this scenario effect my credit rating?
Old 02-10-2006, 11:45 AM   #17
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Re: How will this scenario effect my credit rating?

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Originally Posted by REWahoo!
The CFO tried to cover by saying it had been stolen. *
Oooh, an incompetent financial manager AND a liar. What a couple of great résumé bullets!
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Re: How will this scenario effect my credit rating?
Old 02-10-2006, 11:52 AM   #18
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Re: How will this scenario effect my credit rating?

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Originally Posted by Nords
Oooh, an incompetent financial manager AND a liar. What a couple of great résumé bullets!
It appears not to have hurt his earning power. I understand he moved to California and is the CFO of a small but very profitable Los Angeles film company. :


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Re: How will this scenario effect my credit rating?
Old 02-10-2006, 12:31 PM   #19
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Re: How will this scenario effect my credit rating?

One of the companies I worked for ejected an idiot VP, who was also having severe personal finance problems.

He ended up starting one of those silicon valley internet boomers that was worth a bazillion at the peak. I think he even made some magazines "richest 40 under 40" or some such list.

Company is worth about four bucks right now...
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