How to consolidate credit card?
It is riskier to a lender when the personal loan will be used to consolidate the debt from your credit card. You have killed two birds with one stone. Your credit gets freed up on your card and you are successful in restructuring your debt to a one-month payment. Having balanced on your card increases debt levels that will impact the possibilities of not being able to make payments on your loan.
A hard inquiry will appear on your credit report when you do apply to get credit. In year one it influences your credit and it will remain on your credit report for two years. Some lenders like Lending Club and Prosper don’t do hard inquiries with the application and this won’t negatively affect your credit score. It might not be until you have accepted the offer that the hard inquiry happens.
Bad information stays on your credit report for approximately seven years and there is no doubt that it will affect your credit score. When your payments are made on time it helps to maintain a good credit score and it also influences the interest rate you get on personal loans.
You get to view your credit report and score for free with the myBankrate feature. Your lender may use a different model for scoring than that of myBankrate but the score provided to your lender will be enough for them to provide no-binding indication of the possible interest rates you might get even if you have not yet applied for a loan.