I am in a stinky situation where I accumulated lots of debt by paying my tuition fees on my credit cards and now they are just killing me with interests. Being on a visa, I was not eligible for a federal loan, therefore I went with the next worst thing I knew.
As of now my credit score is just above the "don't even look at it" level and I am looking for approaches to improve it. I am able every month to do all payments in time and I never skipped one, however, I pay ~$850/month just paying the minimum of all cards together.
I did read online, and in this post, about credit settlement and various options moving balance around, however, I have 6 cards with a total out of ~35k. I emailed a credit counselor who suggested their program where I pay them ~$880/month and I'm done in 5 years. however, I also thought about a personal loan to consolidate my debt.
my question is: if I get a personal loan of 20-25k (I don't think I can get much more than that), I'll pay it off in less than 5 years, and I will use it completely and exclusively to close two or three of my highest credit cards. This would increase my available credit of ~20-25k, which I read is really good for the credit score. now, using credit karma's simulator, if I paid off ~20k I would increase my credit score of about 100 points...however, how does the fact that I got a loan for that much affect the credit score in first instance?
is the payoff of paying out so much at once bigger than the initial dip that the credit score would get for obtaining a loan?