I have the opportunity to consolidate some of my higher interest rate under a much lower APR in a personal line of credit. Would it hurt or possibly improve my credit score if I were to do this? Is it better to just pay off the highest APR debt quickly and work my way down?

In this case, the PLC is at 7.45% but rest is held in loads with 20-30% APR.

  • Is the debt you are paying off CC (or other lines of credit) or term loans? They are treated differently by credit models.
    – TTT
    Dec 1 '17 at 17:18

There are multiple effects here:

  1. It should lower your utilization, as it will give you a higher overall credit limit but not change the amount that you owe. This helps your credit rating.
  2. Applying (which you may have already done) can lower your credit in the near term, as the credit inquiry hurts your credit rating. This effect fades pretty soon and will be gone in six months to a year.
  3. If you just use your now open credit cards to borrow more, that will hurt your credit rating.

So if you're ready to work on your debt, this can work as a first step. Just remember, the thing to do is stop borrowing. So pay off your credit cards and then throw them away. They're lousy, high interest cards; you don't need them. You can keep two to four cards that are as cheap or cheaper than your line of credit. Eventually pay them off every month.

Assuming that this makes the line of credit the highest rate debt, pay that off next. Pay as much as you have left each month after paying the minimum on lower rate loans.

The key is to consume within your budget. If you don't do that, then nothing else will matter. Your credit rating will get worse because your debt gets worse.


It's irrelevant, if you don't have your spending problem under control, since the PLC just gives you more rope with which to hang yourself.

The avalanche method (paying off highest interest rate loans first) plus taking advantage of 0% balance transfer offers is the fastest way to pay things off.


It's probably going to help your credit rating, as it will increase your credit limit to outstanding balance ratio, but it might lower your credit rating if you close out the old accounts, as that can decrease the average age of accounts. But the whole point of having a high credit rating is to get lower interest rates, so unless you're planning on buying house or something soon, why give up actual lower rates for the possibility of lower rates?

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