Has anyone tried the credit union trick to get AAA credit? Does it work? This is the way it was explained to me: Now, you have found out how you can become a member of 3 credit unions OR you have enough money to go through a regular bank and are ready to open your first savings account and get your first loan. With a Credit Union the minimum amount for a SECURED loan is $500.00 and a regular bank is $1,000.00. You must have your initial deposit ready and in hand. Here are the steps: Go to the Credit Union and tell the person at the front desk you want to open a savings account. They will get you with someone who can help you. This person will ask you how you are eligible for membership and have you fill out some paperwork. Give them your money for the deposit and you will get a receipt. Once you are done, tell that person that you would now like to apply for a SECURED loan. Sometimes they can help you with that too or they will just take you to the appropriate department. When applying for a secured loan a Credit Union does NOT check your credit! Some regular banks DO. Tell the loan officer that you want to apply for a SECURED loan and use your NEW savings account as the collateral. Because you are going through a Credit Union and because you are getting a secured loan your interest rates will be VERY low. Ours ranged from 7% to 4.9%. Tell them the reason you are applying for a secured loan is to establish positive credit and spread the payments out over a year. They will give you a loan in the amount of your deposit and you leave! Take that loan and head to Credit Union number 2. Start all over again following the above steps until you have completed all 3 secured loans! When you get your last $500.00 loan from Credit Union Number 3, put it back in your bank (checking account, savings account or whatever). Use THAT loan to pay on ALL 3 loans for at least 4 months, preferably longer. The longer pay history you establish, the better your credit will be. It all depends on how long you can afford to make the payments and how long you can afford to have $500.00 or $1,000.00 tied up in savings. When you feel as though you have established a good payment history go back to Credit Union Number 1, pay off your loan to them and pull your money out of the savings account. Take that money to Credit Union Number 2 and pay off that loan and so on until you have paid off all 3 and have your money back in hand and put it back in your account. Ultimately you are out only the interest it cost you over those few months! Maybe $15.00! You have just bought yourself AAA Credit and are well on your way to a GREAT credit score. This was from another credit board. I am thinking of trying it, was wondering if anyone else had.
Dang, that sounds slick ! Is that the 3 bank trick I saw mentioned but not explained in another thread. (perhaps it was bbauer who made mention ?)
Mine offers Mastercard and Gold Mastercard at 7.9% or so. That also gets you 1/2% off their posted vehicle loan interest rates too. Don't know how common that is.
My thought process and perhaps the whole point (that I may have missed) is that if you do this 3 bank trick with the credit unions and pay off the loans in good standing, therefore presumably raising your scores are the credit unions then more likely to offer you one of their prime cards?
If they dont check your credit, do they report to the CRA's on payment history for the loans? in order to establish AAA credit?
Re: Re: Using Credit Unions for AAA credit If they don't report to the CRA'S it is a WASTE of time!!! FIND OUT THE ANSWER TO THAT QUESTION BEFORE YOU GIVE THEM ANY MONEY.
Re: Re: Using Credit Unions for AAA credit Not to be a goober or anything, but my CU definately checked (and *checks!) my credit when I do any-freakin-thing with them... In their defense, they are AWESOME as far as service and leinancy (bounced checks etc.). My sis and my ex both got their accounts from my CU (because of my affiliation) and after credit checks got ATM/Debit Visas. I DID NOT, because when I joined I had lousy credit. After a year or so of membership, I did get a secured loan for a computer (had to provide them the serial number and reciepts from the purchase). I had the payment auto deducted from my account and after a year tried to get a unsecured Visa. No go, reason low credit scores (*CUs are notorious for strengent credit for unsecured loans). Hope this helps... DebMac
Re: Re: Using Credit Unions for AAA credit From what I gather, they do report to the various agencies. I was led to believe they do not check credit initially because you are using the 500.00 in the savings account as collateral. Like I said, I found this on another site, faircreditmovement.org, and I was wondering if anyone had ever tried it. The person that runs this site swears up and down that it worked for her and her husband. I just wondered if anyone else had tried this before.
Re: Re: Using Credit Unions for AAA credit My experience with cd secured loans has been a little different than others. You can find both banks and CUs that will not pull credit reports, however you have to ask because many do(even though the money is 100% safe). Some places you can do a savings secured loan which is simpler. USAA is one national bank you can use, however they have a high minimus for the cd secured loan. I have had very good score results with even very short term cd secured loans(a week) and I don't believe that the time period that you have the loan for is a significant factor(why would FICO punish you for paying a loan off early??). The size of the loan seems to make a difference however. Also some loans report as unsecured which may boost your score a bit more(also looks better on manual review). Also if you only do the loans for a short time period, you need only one credit union or bank. You just pay the loan off early and immediately get another one. I was doing a loan a week with the golden1 credit union!
Re: Re: Using Credit Unions for AAA credit Cool, that even sounds easier. What amount do you suggest? 1000.00 Maybe? Or would 500.00 be sufficieint?
Re: Re: Using Credit Unions for AAA As far as credit building CDs, I think many banks have programs like that now. When we did it we didn't have to have any money to start. We made payments (like $90 a month) for 1 1/2 years on the loan which was secured by a CD. At the end we had an asset to work with. It shows up on all three CRs and looks good.
Re: Re: Using Credit Unions for AAA I had had several golden1 cd secured loans for around $1000. And then just for kicks did one big one with USAA(because it doesn't really cost much other than time). The day my 10k cd secured loan with usaa reported(I check my credit watch almost daily) my equifax fico shot up about 40 points. I'm not 100% sure that it was because of the amount of money--it might be because usaa was a bank not a credit union or because it didn't report as secured, or possibly a combination of the above. I do think $1000 is a good sum to start with, however USAA is the best recommendation I can make because it offers all of the best elements--namely lists as unsecured, no prepayment penalties, no credit check and they report to all 3. Anyways thanks to the cd secured loans and alot of tinkering with my credit report, my equifax fico is a 782 while I'm only 26(I need to check my other FICOs too to see if they are as high).
Re: Re: Using Credit Unions for AAA OK, my interest is at a peak! Our home is in escrow and due to close in a week. We will be sitting on the equity... in CDs... for three to four months. Does anybody know of a bank in Southern California that offers CD secured loans and does not pull credit reports in the process?
Re: Re: Using Credit Unions for AAA I'm here in southern california, too. I've heard the wescom credit union will. They also report secured credit cards as unsecured, so maybe they do the same with cd secured loans. I'm currently trying to set up an account for a friend with them. You can do almost everything over the internet with them, too so you might bs a little and say you worship or work within their area of membership if you don't qualify otherwise.
Re: Re: Re: Using Credit Unions for AAA credit Even though they "CAN" pull a "HARD" for a 100% SECURED LOAN~~IT IS 100% ILLOGICAL IF THEY DO!!!
Re: Re: Re: Using Credit Unions for AAA credit I'm in Southern CA too. There are many CU's in the area. USA Federal CU does secured credit cards, but runs a inquiry just to get a visa check card. Wescom is the name I've heard that comes up all the time.
