I'm planning on building up my credit score using personal loans secured with my savings account. I have a question regarding the frequency/duration I should do this. Does anyone know how how FICO score would be affected if I paid off the loan in, say 2 months vs. 6 months? I'd obviously want to wait until I can confirm positive TL on all 3 CR's, but I wonder what would the effect be on my FICO score based on how quickly I pay off the loan. E.g. I could do this 4 times in 12 months if I pay off the loan every 3 months, but would this help my FICO score better than if I did this only twice paying off the loan every 6 months? I also plan on "stair stepping" the loan amount. Not sure how helpful this will be for FICO but may look good to lender going over CR. E.g. first loan for $1000, next loan $2000, next loan $3000, then $4000. Say I pay each off after 3 months. I'm hoping this technique really helps to raise my FICO in 12 months.... (in addition to lowering outstanding debt to ~20% utilization)
Paying off these loans in a couple of months doesn't show your ability to make long term payments and probably won't do much, if anything for your score. I think you need to make payments for at least 6 months before paying off.
