In order to boost my credit score I would like to add installment loan to my credit file as well. I see it helps to build history. But I donâ??t have any experience with this. What should I look for or ask from my bank. What kind of reason should I give them for requesting loan? How high loan should be? I guess if I lend the money from some of the major banks they will report this to CRA? Thanks!
Whoa, one question at a time (1) Request a SECURED installment loan, not an unsecured one. You deposit, say $1000, and take out a loan against that deposit (2) Recommend $1000 minimum loan, 6 months minimum time (3) Must insist on NO INQUIRY on any report, plus report to ALL 3 BUREAUS. Otherwise walk out (4) Big banks WILL NOT do it without an inquiry. Save your breath. Go to a credit union or a local community bank. You don't want to start out with a hard inquiry. (5) Some credit unions allow for borrowing only upto 60% of your deposit; so plan accordingly. Meaning, you may have to deposit $1800 or so to get a $1000 loan back (6) Reason to give is to "BUILD CREDIT HISTORY" -- my credit union did not even bat an eyelid when I gave that reason Let me know if you have more questions
BUMP Even though I replied, this thread wasn't bumped to the top; so here is a friendly bump to catch Denny's attention
Thank you Lakpr on your support! Youâ??re my buddy! This is valuable information! But I have problem since I donâ??t belong to any credit union. What would be local community bank? I see only Citi, BofA, Chase, HSBC, Wachovia, Washington Mutual etc. I would prefer doing this with some of these banks. Anyone has experience with major banks regarding this matter? Lakpr, thanks once again. Denny
Hi Denny, There is a credit union - Digital Credit Union that anyone can join. You need to become a member of the charity organization "American Association for People With Disabilities", and through that membership, you can claim membership in DCU. Go to the website using the link I gave you, look for About Membership link on the left hand side, and in the resulting page, click the 'A' link. You will be directed to an application form which lets you join both DCU and AAPD simultaneously. Best of luck. I have done this (secured installment loan thingy) at DCU for my wife thrice in fact so far, in an effort to establish credit history. By the way, I see that you are posting on creditboards.com also; if you have time and inclination, please look for my posts (I post there under the same user handle) and see if it benefits you. Too lazy to re-type all that here. [ Oh don't worry, I haven't said anything negative about DCU there ]
Also, are you SURE that you don't fall into membership criteria of ANY credit union? Have you enquired with your family members? Mother/father/sister/brother etc.? Isn't there any geographically based credit union where you live? If you are Minnesota, there is one that you can join; Minnesota's Credit Union. Their membership requirement is simply to be a resident of the state of MN. Some other states might also have some similar geographically based credit unions ... just do a search from bankrate.com
