Secured Credit Union Loan

[eparker]

I'm thinking about getting a secured loan through my credit union.  How long should I let it show history before PIF?  I was going to request a six month loan, should I take it out further or pay it off in 3-4 months?

Any suggestions???????

TU: 615   EQ:  613  Going for the 700 Club as soon as possible!!!!!!!!!

[vulgy1]

History and on time payments build your credit scores, so if your not looking for another loan any time soon why not let it go 12 months?

I put the money(full amt. of loan) into a savings with my CU and have them do an auto pay every month, how ever I plan to pay in full after 6 months, as I plan to try for my first home in Sept. since BK discharge in July 07.

So I guess I also have a question, does it help to have no debt when looking for a Mortgage?

TU-675 Eq-679

[Junejer]

Hi parker, why not see whether or not the CU will allow you to pay the majority of the loan down right away, then you can pay a very minimal balance each month for the remaining term of the loan? Many members here have done that. That said, the very best thing for your FICO score improvement is proper use of a CC. Get a CC, even if secured and only allow the util to report a very minimal balance, like <5% util.

[Junejer]

Vulgy, IMO, you want to show recent revolving activity--1). This is better for the scores, and 2). I believe that lenders like to see that you can handle credit properly.

[Imhotrodcrazy]

Here is a little bit of a different spin that I put on my secured loan that I just got from my credit union. Also,  I have a secured cc,  and I opened up a savings acct with them recently.  When I got the intallment loan I told them to deposit the loan proceeds into my savings acct since I didn't need the money, I was only interested in building my credit score.  They asked me if I wanted to do auto pay with my savings.  I chose not to because I wanted to pay each month thus increasing my savings acct. Therefore, at the end of my payment period, whatever that may be, I will still have that amount in my acct., rather than zero if I used it to pay off the loan.  Its just a thought for you. Good luck.  

Message Edited by Imhotrodcrazy on 05-25-2009 03:49 PM

Message Edited by Imhotrodcrazy on 05-25-2009 03:51 PM

[eparker]

OK....thanks for the replies....I am just going to let the money sit and have them just draft automatically.