topic Re: Secured Loan to improve FICO? in Understanding FICO® Scoring

Secured Loan to improve FICO?

bichonmom — Wed, 09 Nov 2011 10:00:43 GMT

I am *so* frustrated that it seems my attempts to improve my credit are either working *very* slowly or not at all. I'm having trouble getting any CC w/a decent CL. So, I am wondering... How would it affect my FICO score if I got a *large* secured loan? (Okay, by large, I mean maybe $3000 to $4000.)

I'm also thinking that it would help when I next apply for a CC for them to see a bigger CL than I have on presently on my CCs, and that it's being paid timely. I understand that installment loans report differently than revolving. So, I'm wondering if this would help my FICO score.

Thanks! :)

Re: Secured Loan to improve FICO?

llecs — Wed, 09 Nov 2011 15:46:48 GMT

I've let my views be known before on the topic of secured loans. I think they are a waste of resources, have very little impact on mix, potentially lower your score due to new credit and AAoA, and cost $$$ to boot. There are also posters in here who have hit 800+ with no loan reporting. BTW, higher CLs don't help your score, though properly utilizing the CLs you have will.

I know it gets frustrating...we've all hit that FICO credit wall.

Re: Secured Loan to improve FICO?

Booner72 — Wed, 09 Nov 2011 18:15:30 GMT

DH finally had an installment loan hit his reports from us refi-ing our truck. Guess what? His score went DOWN.

Re: Secured Loan to improve FICO?

p- — Wed, 09 Nov 2011 18:45:39 GMT

bichonmom wrote:
I am *so* frustrated that it seems my attempts to improve my credit are either working *very* slowly or not at all. I'm having trouble getting any CC w/a decent CL. So, I am wondering... How would it affect my FICO score if I got a *large* secured loan? (Okay, by large, I mean maybe $3000 to $4000.)

I'm also thinking that it would help when I next apply for a CC for them to see a bigger CL than I have on presently on my CCs, and that it's being paid timely. I understand that installment loans report differently than revolving. So, I'm wondering if this would help my FICO score.

Thanks! :)

I would skip the installment loan; odds are that's not what's keeping you from a large CL. Something else in your history and/or income is likely keeping you from qualifying.

Be patient - get rid of the baddies dragging you down, and keep asking for CL increases on your exisiting cards. When I went through the same thing, I ended up getting offers for credit at or slightly above existing CL's. My largest was 300 bucks, now my largest is 5k.

Re: Secured Loan to improve FICO?

bichonmom — Wed, 09 Nov 2011 18:52:57 GMT

Thanks, everyone, for the replies. It looks like the secured loan wouldn't help. I guess I'll just have to wait and see what kind of CLIs I can get next year. Grrr. :smileysad:

Re: Secured Loan to improve FICO?

bichonmom — Wed, 09 Nov 2011 19:00:19 GMT

P, the thing that really frustrates me is that there are people posting here w/lots of baddies on their report, and they have higher scores than I do and/or they're getting higher CLs than I am. I ONLY have ONE collection, which is due to drop off in Jan/Feb 2012.

Re: Secured Loan to improve FICO?

p- — Wed, 09 Nov 2011 19:06:38 GMT

bichonmom wrote:
P, the thing that really frustrates me is that there are people posting here w/lots of baddies on their report, and they have higher scores than I do and/or they're getting higher CLs than I am. I ONLY have ONE collection, which is due to drop off in Jan/Feb 2012.

That's odd... What else is on your report? Are there lots of inquiries or lates? What credit cards / limits do you have and what balances do you carry on them right now? Are you using a FICO score or another service?

Re: Secured Loan to improve FICO?

bichonmom — Wed, 09 Nov 2011 19:54:19 GMT

p- wrote:

That's odd... What else is on your report? Are there lots of inquiries or lates? What credit cards / limits do you have and what balances do you carry on them right now? Are you using a FICO score or another service?

I have "thin" credit file because I made the mistake of waiting for a BK to fall off before doing anything with my credit. So, except for a couple of old accts that are only showing on 2 of my 3 credit repts., the oldest acct is a secured loan that I got a few years ago.

I have 2 PIF secured loans, 4 CCs: 1 Old navy and 3 visa/mc that will be a year old in the spring. And only $63 balance total on the cards. No lates, about 4 or 5 inquiries. The CLs on the CCs are low, which is my frustration. It's really hard to use a card with such a low CL. They are 2 at $500, $600 (just increased to $1200 thanks to Old Navy) and $750.

Yes, I'm using a true EQ FICO score.

Re: Secured Loan to improve FICO?

p- — Wed, 09 Nov 2011 20:08:46 GMT

bichonmom wrote:
I have "thin" credit file because I made the mistake of waiting for a BK to fall off before doing anything with my credit. So, except for a couple of old accts that are only showing on 2 of my 3 credit repts., the oldest acct is a secured loan that I got a few years ago.

I have 2 PIF secured loans, 4 CCs: 1 Old navy and 3 visa/mc that will be a year old in the spring. And only $63 balance total on the cards. No lates, about 4 or 5 inquiries. The CLs on the CCs are low, which is my frustration. It's really hard to use a card with such a low CL. They are 2 at $500, $600 (just increased to $1200 thanks to Old Navy) and $750.

Yes, I'm using a true EQ FICO score.

Hmm... That's odd to be sow low with no baddies. I would kep asking for CLI's, and maybe see if you can get added as an AU to an account with some history. If there's already a closed installment account, you're getting that benifit. There's no CA's or anything? What does the CA say is harming your score?

Do you have income to justify a larger CL? Have you considered saving up a couple thousand and putting it into a secured card?

Re: Secured Loan to improve FICO?

bichonmom — Wed, 09 Nov 2011 20:34:58 GMT

Only one collection due to drop off in Jan/Feb.

I have a feeling FICO scores based on age. They know how long I've had credit (20-some years), and I think it probably deducts points for having such a thin file after so many years.

Unfortunately, there's no one who can add me as an AU. If I can qualify for an AMEX in the future, I'm hoping to backdate it, which would help all 3 CR a lot.

I guess right now there's nothing else I can do but wait and get CLIs as I'm able. I don't want to add anymore CCs right now because my AAoA is totally zapped.

I'll be curious to see what my score goes to after the collection falls off. Given that it's so old and a small amount and I'm going to be re-bucketed, I'm not sure if I'll see a big jump or not. But it sure would be nice!

Re: Secured Loan to improve FICO?

p- — Thu, 10 Nov 2011 19:46:23 GMT

Good luck!

Re: Secured Loan to improve FICO?

Ms-Kato — Fri, 11 Nov 2011 23:50:07 GMT

Did you call all the back door numbers and explain to them what

you said here ?

What's your AAoA ?

Re: Secured Loan to improve FICO?

HiLine — Mon, 29 Oct 2012 06:18:56 GMT

llecs wrote:
I've let my views be known before on the topic of secured loans. I think they are a waste of resources, have very little impact on mix, potentially lower your score due to new credit and AAoA, and cost $$$ to boot. There are also posters in here who have hit 800+ with no loan reporting. BTW, higher CLs don't help your score, though properly utilizing the CLs you have will.

I know it gets frustrating...we've all hit that FICO credit wall.

Thanks for your views. I was thinking of getting a secured loan to help the mix, but if its impact would be minimal I wouldn't bother.