Are my FICOs "maxed out" for borrowing purposes (i.e. $ amount allowed)?

[Anonymous]

Hello - so, i will be borrowing 6 figures, via unsecured personal loans. I have already been pre-approved at SoFi ($75k), Marcus ($25k), FinanceFactory ($75k), etc ..... i want to borrow as much as they will possibly allow (up to $300k if i can). This is for a business startup opportunity. I have checked my latest FICO 08 scores, and they are as follows: EQ08 = 781, TU08 = 799, and EX08 = 804

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I was considering adding a small installment loan and paying 92% of it down quickly, via the "Share Secure technique", because, given that i have no "credit mix" on my credit reports (i.e. only credit cards as of right now), i can use this technique to raise my FICO by 30 points or so. However, this process will take roughly 30 to 45 days to increase my FICO scores.

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So my question is: will adding 30 points, given that my FICOs are already high, make much of a difference (or any at all), with respect to how *much* i can borrow from these places? Getting the loan $ is time sensitive, so i'd like to pull the trigger now, if i am already at FICO "maximums" in terms of how much it will allow me to borrow. The interest rate is less of a concern, but that would be a nice benefit as well, to get that as low as possible.

Thanks! 

[Anonymous]

In another thread, I think you mentioned that at least one lender turned you down for having no history with installment loans.  (You have no loans, closed or open.)  Am I misremembering that?  If so, then there may be a benefit to simply having the SS loan quite independent of the way that the technique boosts your score.  Aside from approval probability it could affect the dollar amount they will approve for -- and I am basing that primarily on what you said you were hearing from lenders.

A slight correction to how long it will take for the SS loan to materialize on your reports... I would project < 30 days at this point, not 30-45.  Alliant will report the loan on July 1, and it typically takes 4-6 business days after that for the CRAs to update their databases.  July 4 lies in there so we are probably talking about the loan appearing July 10-12.  Today is June 13 so that is < 30 days.

[Anonymous]

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@Anonymous wrote:

In another thread, I think you mentioned that at least one lender turned you down for having no history with installment loans.  (You have no loans, closed or open.)  Am I misremembering that?  If so, then there may be a benefit to simply having the SS loan quite independent of the way that the technique boosts your score.  Aside from approval probability it could affect the dollar amount they will approve for -- and I am basing that primarily on what you said you were hearing from lenders.

A slight correction to how long it will take for the SS loan to materialize on your reports... I would project < 30 days at this point, not 30-45.  Alliant will report the loan on July 1, and it typically takes 4-6 business days after that for the CRAs to update their databases.  July 4 lies in there so we are probably talking about the loan appearing July 10-12.  Today is June 13 so that is < 30 days.

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Yes, that is true.... it was Avant that turned me down.... but when i researched the reviews on them, many people said they had the same experience, 800+ FICOs, and Avant wouldnt lend them a dollar. 

But you raise a good point ... maybe places like SoFi have something in their algorithm, so that i am not getting approved for as much as i could, just from having no installment loan (independent of the FICO score). Is that how it works? Banks have their own internal algorithms, where they weigh factors other than just the FICO score?

Also, when you say just having the SS loan, i assume you mean also, that includes paying it down below 9% of its balance? (because i assume even a small loan, at 100% utilization, would actually be a net harm to my fico)

Thank you for your help, greatly appreciate it! 

[Anonymous]

If you had time and the willingness to take a swing for the sake of science, we could try answering the question of what happens to a person's score when he goes from (a) no installment loans of any kind (closed or open) to (b) an open installment loan at 100% utilization.  I suspect that you'd get a net benefit, since you'd be improving your credit mix.

You don't have time, however, so yes I am talking about adding the $500 SS loan and paying it down to $44, and doing all that well before June 26.  You should do all that -- or do none of it.

I think the issue here is simply time.  If there would be a big financial advantage to applying for the big unsecured loans tomorrow, then do it.  If you can wait, then there is a possible (but still speculative) advantage to having an installment loan on your reports.  The inner approval process at each lender conceivably could react differently regarding loan amount if its software detects an installment loan that is mostly paid off (as opposed to a person who has never had a loan before, which is what your reports say now).

[Anonymous]

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@Anonymous wrote:

If you had time and the willingness to take a swing for the sake of science, we could try answering the question of what happens to a person's score when he goes from (a) no installment loans of any kind (closed or open) to (b) an open installment loan at 100% utilization.  I suspect that you'd get a net benefit, since you'd be improving your credit mix.

You don't have time, however, so yes I am talking about adding the $500 SS loan and paying it down to $44, and doing all that well before June 26.  You should do all that -- or do none of it.

I think the issue here is simply time.  If there would be a big financial advantage to applying for the big unsecured loans tomorrow, then do it.  If you can wait, then there is a possible (but still speculative) advantage to having an installment loan on your reports.  The inner approval process at each lender conceivably could react differently regarding loan amount if its software detects an installment loan that is mostly paid off (as opposed to a person who has never had a loan before, which is what your reports say now).

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Thanks! ok, i am going to open an account today and get that process going asap......AND, good news, my buddy is a mortgage broker, and he will do a rapid-rescore for me on one account (it would result in a hard pull however), and so i could have him do the RR on this installment loan, if that would speed things up ..... i need to re-read that thread on the installment loan method, to figure out if the RR would help speed things up.

ps - i am all for "crowd-sourcing", and would love to do what you suggest in your first paragraph .... but it's too risky, so i want to pay it down to $44 immediately  :-)

[Anonymous]

If you go with the SS loan (and I by no means pushing it) I am skeptical that an RR would help much.  You need to get approved for membership at Alliant, then apply for the loan, then get approved for the loan, then pay it down and that will take a while anyway.  (Though I am confident that you can get it done by Monday June 26.)

BTW, in an another thread, you mentioned that you had paid all cards to $0.  I mentioned at the time that this would hurt your score.  Have you fixed that, with one card reporting a small balance?

[Anonymous]

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@Anonymous wrote:

If you go with the SS loan (and I by no means pushing it) I am skeptical that an RR would help much.  You need to get approved for membership at Alliant, then apply for the loan, then get approved for the loan, then pay it down and that will take a while anyway.  (Though I am confident that you can get it done by Monday June 26.)

BTW, in an another thread, you mentioned that you had paid all cards to $0.  I mentioned at the time that this would hurt your score.  Have you fixed that, with one card reporting a small balance?

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Good point on the RR, and from what i've seen, there is a lot of 'sloppiness' in the way so many of these things work, so that the RR might take a week or two to even show up. I say sloppiness, because after doing a deep dive on my credit report, i noticed that some cards didnt report to a bureau at all in a given month, yet reported to the 2 other bureaus (even though there was a balance), some reported weeks before the statement closing date, some reported weeks after the closing date, some of the reporting dates listed on the CR are wrong by weeks ..... so i am learning that these processes are not as neat and tidy and rule-based as i thought they would be. 

Thanks on the zero balance things ....but if you recall, that CC co's didnt report all the $0 balances at once, so there were a couple of straggler $500 balances that will stay on there til early July, so i am all set there :-)

[Anonymous]

Great.  Best of luck with all this!