I learned this tip today from a bank representative. When you get a secured loan, try hard to get an open end agreement (most banks and CUs offer it without asking.) By secured loan, I mean: "You take an amount of money (some credit unions and banks require $500 minimum, others don't care, credit experts say $1,000 is optimal) and go to credit union or bank #1. You tell them you want a 100% savings (or share at CU) secured loan, with your $. MAKE SURE they will not pull an inquiry (if this is essential to you) and that they report to credit bureaus. They will take your say $1,000 and deposit it into the savings account. The amount will freeze and become available as you pay the loan off. You will get the $1,000 right back as the loan. Repeat this at several banks/CUs if you can. Most rates are 2-3% above the savings interest rate. Get the loan for 12 or more months if possible. Once done, put that $ aside and use it to pay off the loan. Some banks/CUs will even set up your savings account to pay itself off, but this is rare. Whatever happens, make sure you pay those loans! Put the $ in another savings account to earn interest to offset your loan interest. You now have multiple positive installment tradelines." The new suggestion I am using is: Example: I opened a loan at a CU for $1,000. I took the $1,000, waited a few days, and added $500 of that. I can keep adding, and adding, until my installment loan reaches say, $5,000. This is really helpful to those who have very little upfront. Add on to it on payday...you get the money right back, just be sure you can pay it off if you're not leaving money in the savings account.
