keeping your total utilization below 30%.
This loan can push you above that threshold
and lower your credit score, says Bruce McClary,
spokesperson for the National Foundation for
Credit Counseling.
COMPARE ALTERNATIVES
Whenever you borrow, compare interest
rates on multiple loan options and consider
features that build your credit or offer flexible
payment schedules.
— Personal loans may offer lower rates,
especially if you have excellent credit, and higher
loan amounts. They also show up as separate
accounts on your credit reports, helping to
diversify your accounts and indicate you can
handle different types of credit, ultimately lifting
your scores.
— If you qualify, a 0% APR credit card is an
interest-free loan, as long as you pay the balance
before the introductory offer period ends. Also,
you may earn cash back or travel rewards with
this credit card.
“If you’re able to get a credit card with no
interest, and you pay it off within the time
frame, you’re going to be way better off
financially,” Rae says.
RELATED LINKS:
Experian: What is a credit utilization rate?
https://www.experian.com/blogs/ask-
experian/credit-education/score-basics/
credit-utilization-rate/
NerdWallet: How to Get an Unsecured
Personal Loan
http://bit.ly/nerdwallet-cheap-personal-loans