Loan v Maxed out card

dontknowwhattodonext

I had maxed out my card on 0%, which before the end I had not cleared so got a loan at 5.9%, my report is yet to show the loan, but it says low score as high card usage, now the card is clear, will this help my score?

MorningcoffeeIV

No, but it doesn't matter. No one ever sees your score.

You'll be assessed on your indebtedness, which will be the same. Your position will be slightly worsened by not having the debt on a promotional rate.

dontknowwhattodonext

My credit report says I have high credit utilization abover 30%, now my card is clear presume this will disappear

DullGreyGuy

It probably will, but given you are the only person in the world that will ever have seen it... does it matter? You may well get a short term debt warning in its place.

Ebe_Scrooge

Percentage utilisation is something the reference agencies do like to harp on about, but the only time it matters is if you're carrying a credit card debt from month to month.  For instance, if you've got a credit card limit of £1000 and you always have £800 on there, and only pay the minimum amount every month, this will be a red flag to lenders.  But if you use £999 of it every month but always clear it in full, there's no issue whatsoever.

What lenders will be interested in is the total amount of debt you're carrying.  Ignore your score, it means nothing.  Although, the only time folk tend to (mistakenly) get worried about the fictional score is if they plan on getting further credit.  Given that you've not been able to repay your 0% debt, and now will be paying more (in interest) to try and clear it at 5.9%, more credit is the last thing you need.  You need to focus on living within your means and on repaying that loan as fast as you possibly can.

For the avoidance of any doubt, this is intended as helpful advice, and is in no way intended to be "preaching".  We've all been there - well, I have in the past, for sure.  It's all too easy to let debt run away with you - this is a lesson I personally learnt from the School of Life and the University of (very) Hard Knocks.

dontknowwhattodonext

Totally understand but the reason I was unble to clear before the 0% expired and did not want to pay card interest was a reduction in salary and a divorce which is costing a lot of legal fees which hoopefully is nearer the end, so yes once all sorted plan to pay loan back sooner.

Ebe_Scrooge

dontknowwhattodonext said:

Totally understand but the reason I was unble to clear before the 0% expired and did not want to pay card interest was a reduction in salary and a divorce which is costing a lot of legal fees which hoopefully is nearer the end, so yes once all sorted plan to pay loan back sooner.

Thanks for coming back on that point - and I'm sorry to hear of your difficulties.  Like I say, been there, done that, got the t-shirt.  It's all too easy for well-meaning advice to be interpreted as "you silly fool", but that is absolutely not how it's intended.  If I can help someone else avoid the mistakes I made in earlier life, I consider that a job well done.

The one thing I would urge you to do - and again, this comes from personal experience - is, having cleared the credit card, please don't go and start spending on it again.  Unless you're absolutely, totally, 100% certain that you'll be able to repay the spending in full every month, in addition to your loan repayments.  That is so often the danger when taking out a "consolidation" loan.  But I sincerely hope you're able to able to carry on, repay the loan (early, if at all possible), and not be plagued by any further financial worries.

dontknowwhattodonext

Yes, will 100% clear the card which I use for fuel and have been clearing all the time each month, the 0% was a different card that I have "hidden"