03-05-2013 09:38 PM
Is anyone familiar with how much a shared secured loan through a credit union helps/boost your credit rating? Also, how much is a good amount to establish it? I understand if I submit $1,000, they will setup a loan with it and I will borrow against it and make monthly payments. But if you start with 2or 3,000, will that hurt your debt to income ratio? I make 75K, and just have a Capitol One Platinum Secured ($500). Thanks for any insight or tips!!!!
03-06-2013 05:04 AM - edited 03-06-2013 05:07 AM
I have a secured loan through my local CU. It hasn't really had much of an effect on my score, other than showing perfect payment history. I don't know about DTI, hopefully someone more knowledgeable can help you there.
What it HAS done is built a relationship and opened the door for more loans through my CU. When I first got the loan, I had only a CapOne secured card with a $300 CL. Six months after I opened the secured loan, I was approved for a car loan and an unsecured CC through the credit union. It shows as an installment loan, which helps with having different types of loans. So I'd say it was definitely worth it, for me. As a somewhat interesting aside - and I don't know if this is how the SDFCU secured loan works or not - once I make a payment on the loan, that money immediately becomes available for withdrawal or use. So, I make my monthly payment ($58), and then immediately turn around and apply that $58 (minus interest, which I think is something like $1.50/month) to my car loan. It's really convenient for me.
Oh, one more thing: again, it's a different credit union, so YMMV, but I didn't have to make an initial deposit on my loan. It was in the amount of $1000, but the money only became accessible to me after and as I made monthly payments. Hopefully that makes sense.
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