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mycreditkarmarc

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Take out a loan to help with credit mix after bankruptcy
I am considering taking out a very low interest 0.48% title auto loan for around $3,000 term 24 or 36 months for the purpose of increasing my debt mix and hoping to raise my credit score. How would you advise me considering the following state of my credit profile: declared Chapter7 bankruptcy in 2008 and have since established unsecured credit cards total credit limit across all cards $39,900. My credit scores have been steady at 714 TU and 729 EQ for the past year. Minor variations here and there. CC utilization is between 1%-2% every month. I have 100% on-time payment history. My average credit age is 2yr 6mos. Total accounts 10 TU/11 EQ and Inquires 8 TU/5 EQ. I was thinking the loan may initially give me a hit and decrease my credit score but after 4-6 mos i would be benefiting from the loan by having a new account and also my more on-time payment history and the additional mix of the installment loan. An additional question, if you think this is a good idea to go forward with the loan, should i make the minimum monthly loan payment or pay more the minimum each month to the loan payment?

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Title loan at 0.48%? Need to double check if its a daily rate or its a annual rate (APR).

Reply by
mycreditkarmarc

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Thanks for your question. The loan ia 1.48% APR however i will be putting the money in a savings acocutn receiving 1% interest so the net is roughly 0.48%.  The interest is minimal almost insignificant and I am willing to pay it if it makes sense taking out the loan.

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