Short-term loan offerings: Which product keeps the FICO “ding” to an absolute minimum?
In the next few months, I’m planning to borrow a few grand for some house fixups and a few other things. Strictly short term, with an expected payoff in six months. I’ve got no credit card debt, a FICO in the low 700s, and steady income, so my risk exposure’s fairly limited.
About two years ago, my FICO took a 30-point hit due to “revolving credit.” Later, I found out that this referred to my home equity line of credit, which was viewed, apparently, in the same light as credit card debt. So I’ve nixed this route.
I figure I’ve got three options this time around.
1.A home equity *loan* (a flat amount, rather than a revolving line).
Pro: Should be regarded as a second mortgage, rather than a credit line. No FICO ding, I hope.
Con: 7% plus interest.
2. Borrowing from an existing credit card.
Pro: No new ap form to fill out — easy as pie. A zero rate for the first six months, and I’d pay off the loan at the end of this term.
Con: My “credit utilization ratio” for the card would go up to 100%. Major ding, possibly. Also, I’d have to phone in payments every month, losing the convenience of autopay.
3.Apply for a new card with a high credit limit.
Pro: The credit utilization ratio on my existing cards would remain the same.Zero percent interest, short term.
Cons: 100% credit utilization on the new card, for a ding. A “new card application” potential ding.
4. (Insert hive suggestion here).
Comments, feedback, ideas? Also, if I go the “new card” route, suggestions for specific cards with good terms also welcome.