Which looks better on a credit report?

[udsweetpea]

Which would look better on a credit report... a personal loan or credit card debt? I'd like to pay off my credit card with a low interest personal loan but would it look good on the credit report?

[amorey]

If the personal loan is an installment loan, meaning you pay the same amount each month until your balance is gone, that would look better on your credit report. Credit cards are revolving debt, which looks worse on your credit report. Using a high percentage of your avaible credit can really tank your credit score.

[udsweetpea]

Thanks for the reply, amorey! That makes perfect sense! I guess now its time to apply for that loan :)

[tlew12778]

Actually, your credit score is partly based on your MIX of loan types... you want both revolving and installment on there. You don't need to necessarily close out your revolving accounts though.

[amorey]

That's true; you won't want to close the CC accounts, especially if you've had them a long time. However, if you have a 10k credit card limit and it's maxed out, that looks a lot worse than having no CC debt and a 10k installment loan.