If I open a 25k installment loan secured by a CD, What educated guess can you guys give me about an increase/decrease in my fico score?? Thanks!
ONLY F.I.C.O. KNOWS FOR SURE... If you use only a "BIT" of it it should help a lot...if you "MAX" it out...it might hurt A LOT... If you use it to pay down other cards you MIGHT lose only a few points... ...BUT WITH RNG WHO KNOWS...
Re: Re: Fico Increase w/$25k Instlmnt Loan? Wouldnt all of it be "used" if it is a installment loan? Or did I read this wrong.. thanks guys.. As far as will it help or not.. Like George said.. Only FICO really knows.. I would think it would help a little in a couple months, if you do not have other installment loans.. if you do.. Then who knows.. I do know credit mix has helped my credit score.. but nothing happened at first... I think when I got my installment loan.. it dropped at first then within the next 4 months it actually went up from its previous high.. a couple of points
Re: Re: Fico Increase w/$25k Instlm Hmm... How about if I made it a revolving LOC that is secured against a CD? Or is it better or worse if it doesnot come up as secured?
Re: Re: Fico Increase w/$25k Instlm Nestea, I've done quite a few cd secured loans and I've never seen them drop scores, even when they first report. A friend of mine with a six month old a t and t wireless acount and a couple year old cd secured loans, had a 708 fico score! Like I said before , I had a big cd secured loan and my score shot up 40 points even before iI made one payment. Incidently, You can find if you look banks or credit unions who will do a cd-secured(or sometimes a savings account secured) loan without an inquiry, and without prepayment penalties(so you could actually put several 25k loans on your report in a short period of time) I'm eager to try wescom here in S. California because they are the ones that report their secured credit cards as unsecured. Maybe they do the same for cd secured loans.
Re: Re: Fico Increase w/$25k Instlm it will lower the average age of accounts.... how big was the secured loan? 25k? more? less?? nestea
Re: Re: Fico Increase w/$25k Instlm 10 k. I'm not so sure the average age of installment accounts is considered. For my friend to get a 708 it has to value those cd secured loans pretty high.
Re: Re: Fico Increase w/$25k Instlm OK< did some checking... www.theapplebank.com will gove me a revolving or installment loan that is secured. It will show up as secured. does the "secured" make the scoring system higher its point value or lower it?
Re: Re: Fico Increase w/$25k Instlm What is the interest rate and term for the loan and what is the interest rate and term for the CD? Buckets
Re: Re: Fico Increase w/$25k Instlm well.. it depends, length of term on cd, etc.... its like a one or two point spread. (I would not put the money in a cd though, I'd put it in a savings account, or a 30 day CD that keeps rolling over...) What do you think of a $25k revolving CL? brand new, CR will say secured..... but still.... $25k limit.... hmmm???????????
Re: Re: Fico Increase w/$25k Instlm I know a CD interest rate is determined by the term and the institution, but I was wondering about how your math worked out on this secured installment loan. If you were going to be getting a $10,000 loan for 1 year, the best CD rate according to BANKRATE.com is approximately 2.5% to 2.71%. What interest rate is the institution you name above going to provide on a 1 year CD attached to an installment loan? Is it better than a standard rate? Is it worse? And what interest rate are they going to attach to the personal loan? Is it much lower because the loan is secured? I'm just wondering how much money a person would lose (or gain, I suppose) employing this tactic. Also, I don't think you can secure a savings account (so to speak) as you suggest to secure a personal loan. Buckets
Re: Re: Fico Increase w/$25k Instlm Nestea, I'm very sure FICO likes high limit credit cards, it may be the case that it likes high limit installment loans too. I personally don't think it is the secured notation that upped my scores so much. I wouldn't get the secured revolving line unless you don't already have a high limit cc (above 20k). That is interesting I had never heard of a cd secured revolving line of credit. I just talked to Applebank and they say they don't even run a credit check. This might be one of the best ways to restart your credit after a bankruptcy!
Re: Re: Fico Increase w/$25k Instlm since its revolving, I would take a $25k line of credit, pay down $24k of it, and leave 1k owing for a few months.... then pay that off..... I have cc's with $17,500 limit (joint and AU accounts). is this a good idea?
Re: Re: Re: Fico Increase w/$25k In But they killed me w/ a sixty day late when I started building my credit at age 18 by putting a 60 day late notation... Im thinking, havinga $25k account with them (to secure the loan) might be a great "addition" to my goodwill letter
Re: Re: Re: Fico Increase w/$25k In But what are the interest rates on the CD and on the loan? Buckets
Re: Re: Re: Fico Increase w/$25k In Just called apple bank. (www.theapplebank.com) heres the scoop... Rate on secured loan is 7.99% Best CD rate is 3.70% for 5 year, 6 months CD rate is at 0.75% So.... as per the rep.... If i make it a INSTALLMNET line of credit, as the balance goes down the money becomes available. so a $25k installment loan could be paid down to $1k balance, which I could pay over many months (or take a balloon payment for $1000 plus 7.9% per year, for X amount of years, which would keep the account active. If, however, i did a revolving LOC with them, the original deposit money would remain "frozen" until the LOC was closed. No prepayment penalty, besides if your money is in a CD and you "crack the CD", for which all banks charge. so, either a 15 day CD (they have one) or 6 month CD, or a savings account......
Re: Re: Re: Fico Increase w/$25k In You might try USAA, the amount applebank wants to charge you sounds high. USAA will charge you 2.25% above the rate of the cd and you can do the loan for as long as the term of the cd. No prepayment penalty and no inquiry (they do have a $5000 minimum though). They've also reported to all of the bureaus for the people on this board who've used them. So basically you would put in 25k, immediately get back almost 25k (I don't know if you have to make monthly payments after that or what, I paid mine off almost immediately). You would essentially pay $600 in interest per year for them to report the positive account (thats why I paid mine off early). It might be a good idea to pay it back slowly though over a few years. Their number if you are interested is 800.531.2265.
Re: Re: Re: Re: Fico Increase w/$25k In F.Y.I.~~it has been said here...DON'T pay off a CD loan in less than 6 months (one year plus is better)...and DON'T do a CD loan for less than $1,000. Call the bank and CONFIRM that they will report the CD LOAN...if they won't...move on to a different bank...
Re: Re: Re: Re: Fico Increase w/$25k In george, I agree that it has been said here, but I have not heard the personal experiences to back up those points. A lot of people were saying that when a cd secured loan first reports it'll lower your scores which has not even been close to my experience or the experience of my friend. They've also said having one open for a month is worthless. My friend had a year old credit history with a few one month cd secured loans and a six month old att wireless account which gave him a 708 transunion fico score--my jaw dropped because it had taken me years to get to that kind of score. My personal belief that those aspects of accounts you mention are more important for revolving lines of credit (but who knows FICO IS a fickle mistress). Afterall one person on this board had mentioned his father had an 850 score with only car loans and credit cards, no mortgages which seems to support my theory that the age of installment accounts isn't so important.
