Michael wrote in his previous post about how Mil could have taken only 3K and done 3 secured loans at banks (see below). My question is, how long should someone take out the loans for in order for them to look good on your report. I am wondering if they can be taken out and paid off in less than 6 months and still look like 3 good trade lines. Also, do the banks report them as secured?? _______________________________ Author: Michael (1cust134.tnt1.guelph.on.da.uu.net) Date: 11-10-2000 19:29 One point, To do this you don't need to tie up $9K. Take 3K (or whatever) go to the first bank,open the C.D. and get the loan on the secured C.D. Get the loan structured to be interest payments only. Then at the end "Cash Out" the C.D. to pay off the loan, (one paper cancels out the other!). With the $3K your "borrowing" go to bank 2 and repeat, and bank 3. Thus you've borrowed $9K with no tie up of your $$$. You could even borrow that money from a friend (to start)and pay him back in 1-2 weeks!
RE: Secured Loan Question for I would think that as long as they're reported and updated correctly, having paid off 3 installment loans in a timely fashion would result in a higher score, even if they were paid off over a few months. I wouldn't go any less than 3 months, though.
RE: Secured Loan Question for OF course I am not Mil or Michael. But Kristi answered this question for us recently. You should wait 6-12 months at least,leaning closer to 12 months. As for you second question, when I did a secured loan all 3 credit bureaus reported it as secured. I wonder if they are on Mil's report yet? roni.
RE: Secured Loan Question for Wait, I paid mine in 4 months, paid off in July. Equifax still has the account rated as too new to rate. Go figure.
RE: Secured Loan Question for My understanding according to what lenders have told me is that loans secured by CDs show on the report the same way a car loan shows, or a personal loan shows.
RE: Secured Loan Question for As Roni stated I wouldn't do a loan for less than 6 months and 12 months would be better. Remember if you structure the loan as I stated with a baloon payment at the end of 1 yr for the principal your only making a small interest payment each month, cashing out the C.D. in 12, which pays off the loan and gives you back the interest from it. I also would only do 2 loans max. 3 loans in my oppinion is overkill. The loan is a personal loan and should not be reported as secured, but hey even if it is it won't effect your fico score and shows you can make payments.
