I am going to be attending a junior college in the fall. I have the money for tuition. But I have an idea. My best credit score is 569 with experian. Not too good at all. I only have 2 revolving account with low limits. ($500 and $200) I was thinking about I can get a guaranteed student loan for like a $1200. Sign for it. After cashing it, wait 30 - 60 days for it to show on my credit report and pay it off in full. Does this sound like plausible a way to get a lasting positive credit entry?
What does it cost you in fees and hassle? If you just maintain your accounts paid as agreed, and over time (6 months to a year) open another account on good terms, in the long run you will get about the same benefit. How old are your existing revolving accounts? Are they store cards, or are they MC or VISA? Are you currently getting CC offers from reputable companies, and on what terms?
The fees associated originator points would be between 2 to 4% of the amount of the loan, depending on what financial institution i use. So for a $1200 loan it would be $24 to $48. Probably will take around 45 mins to fill out application online. After I pay it off. I figure that it will add to my paid as agreed standing. And since it is a one time loan, I can never increase the balance. I have opted out. So i don't get any CC offers. The ones I received in the past are the 2 I currently used. I have a chase and a chevron rebuilder. Thanks to US Postal service. I had a payment that arrived a few days late for Chase but they didn't report me as late. Been current with them for 8 months. chevron is still new. They have only report twice. I am looking forward to the 600 club. I have 5 items that are to age off in early 07. 1 capital one that is going to age off 11/06. According to Transunion, 2 of the account that are due to age off in 07 are collections that the CAs have added 3 or more months beyond the last delinquency reported by the OCs. Experians has those same accounts. With newer opened days. Also, there are two accounts with the same account number from the same CA being report as two separate revolving accounts with different open dates and different balances.
"I had a payment that arrived a few days late for Chase but they didn't report me as late. Been current with them for 8 months. chevron is still new. " They shouldn't report it as "late" until it is 30 days late, since that is the shortest late category the CRAs show. Is there a reason you have opted out? Are all your CA accounts shown as paid? Do you have a CC yet thru the bank or credit union where you have your checking account? If you have some history with them, and a couple other accounts reporting positively, that should be an easy approval. You might want to wait a few months, however, for your recent inquiry to fade. You can build your positive credit without paying for it, and you already have started. With open accounts, you both build your scores, increase your available credit, and establish an additional credit relationship that may grow into better terms later. What you propose does none of that. Taking a loan, and paying $48 to do it, yet, just to get a tradeline, seems a bit excessive. You also run some risk of damage if they screw up your account.
