Will debt consolidation help?

[Monkeygirl]

I just got off the phone with my credit union and they offered me a
$4k loan at 13%. I did not take the loan, but was thinking that maybe I
should ( i have 30 days to make a decision) and use the money to pay off
my credit card balances to decrease my utilisation ratio ( currently
43%). My question is, how would taking this personal loan affect my
credit score? will the less utilization ration bring a significant
change on the credit score? how is this line going to affect me shopping
for mortgages in a few months? In other words, is it worth it to take
this extra $4k loan and decrease my credit card balances? Here's my
current balances on my credit cards and their respective limits :

 

Discover Finance : Bal: $2386 Limit $4k

Citi : Bal: $2073 Limit : $4k

Chase Bal : $1743 Limit $3k

Brclay: Bal:$1020 Limit $2k

Amex: Bal :120, no set limit, paid of every month

[luckydriver]

banks look at scores when it comes to mortgages. would you qualify for today for a mortgage with your current monthly payments and scores? if so, no need to do the loan

 

a bank doesnt care per se about your util but of course you know that it does affect your scores.

 

what will the util be after the loan? you didnt say the monthly payment of it

 

new credit close to mortgage buying is generally frowned upon but you can explain it was to consolidate. as long as you dont do it 'close to' the mortgage i'd think u should be ok

 

also interest rates on those cards would need to be known to make a better decision. i just realized you cant pay them all off with the 4K

Edited April 3, 2013 by luckydriver

[Clydesmom]

What are the interest rates on the card(s)? If the rate is above 13% then paying off at least two of them with a significant dent in the largest would certainly reduce the amount of interest you are paying. If you are going to attempt o get a mortgage the key would not be racking up balances again until approved.

[Monkeygirl]

Chase and Citi have a 19.9% interest rate, the rest of the cards have a 0% int rate. Minimum payment is low on all of them around $30-60 max but i pay more than minimum monthly. The $4k loan would be at 13.5% I guess what i am trying to find is, if I decrease my utilization ratio, would that dramatically change my credit score? My current score is at 658.. I want to get to around 700 before applying for a mortgage but I wanna do so within the next 3-6 months. So, is it worth it to take this new loan, to decrease my utilization ratios to less thnan 30% on each card? I did apply at one bank last week for a mortgage just to see what I would get and they qualified me for $200k at 3.7% so yes I guess I would qualify for a loan with my current score, Id like to go higher to $250k though with a lower int.rate if possible, thats why I want to work on my score and see what can be done. Besides the credit cards, I have 2 other negative things on my current report: 1 is a medical bill that went to colelctions for $189, I paid it yesterday and they said they were going to delete that from my report but I havent gotten confirmation yet. The other negative is a collection for $2.4k for a lease I signed with my ex husband that he defaulted on and I am a cosigner, that one is out of my control as I have been telling him he needs to pay it off and he said he was going to call them and try to see how to settle it, I don't want to pay it because technically it is his responsibility grrr but it is affecting me. I don't have anything else on my report.