Savings/CD Secured Loan

[Commutator]

Can I get one without a HP? Is it an advisable thing to do to build credit? Will I still have to provide income verification? While the loan is active, will it affect my applications for credit (e.g. DTI, etc) as badly as a normal loan will?

[denver133]

Do you currently have a installment loan like a student loan or car loan?   If so, stay current on those and dont bother.  

If you dont have the above, then yes.  An installment loan like this will help.   

-  It will depend on the bank about the HP.  

-  It will depend on the bank about what income verification will be needed

-  YMMV depending on your credit profile regarding this loan.  You will see a drop in AAoA but since you dont have other installment loans, it should help over time.   I will affect your DTI as any other personal loan.

[RBFool]

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@denver133 wrote:

Do you currently have a installment loan like a student loan or car loan?   If so, stay current on those and dont bother.  

If you dont have the above, then yes.  An installment loan like this will help.   

-  It will depend on the bank about the HP.  

-  It will depend on the bank about what income verification will be needed

-  YMMV depending on your credit profile regarding this loan.  You will see a drop in AAoA but since you dont have other installment loans, it should help over time.   I will affect your DTI as any other personal loan.

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Thanks so much for answering this. I had the same quesiton. In my case since I still have my student loans I'm going to not do the secured CD that I had planned. So far I have a cap 1 secured card and my student loan. I can't seem to get a second Cap 1 card after my chapter 7. I'll just have to wait 6 months to see if I can get another one.

[elim]

i didn't have any open installment loans on my CR's so i opened a 1k/12mo share secured at the credit union i just joined. that loan was the most i could do with the cash i had and the credit i have (open fed lien). i'm doubtful the short length of the loan will do much for my credit history or bump my score much but i'm hoping it will strengthen the relationship with my CU and in a year i will have the extra 2k (to add to a down payment or whatever) in the savings if i'm ready to get a real loan from them.

[Commutator]

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@denver133 wrote:

Do you currently have a installment loan like a student loan or car loan?   If so, stay current on those and dont bother.  

If you dont have the above, then yes.  An installment loan like this will help.   

-  It will depend on the bank about the HP.  

-  It will depend on the bank about what income verification will be needed

-  YMMV depending on your credit profile regarding this loan.  You will see a drop in AAoA but since you dont have other installment loans, it should help over time.   I will affect your DTI as any other personal loan.

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Thanks! I do not have any installment loans. I was originally thinking of getting a car loan, but income verification is going to be difficult. Hopefully since the entire loan is secured by cash the lender will not need to verify my income. Given a choice, should I loan a smaller or larger amount?

Also, I was thinking of adding my girlfriend as a co-signer to this just to build her credit. She has an even shorter credit history than me, and I don't think she even has a FICO score yet. Will it help her, or will it just make it more difficult for her to get her second credit card? Will the lender even allow her on as co-signer if they can't pull a score? I will be servicing the loan myself. Also, we trust one another to make the right decisions with credit.