Secured loan - Amount

[Revelate]

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@Anonymous wrote:

Yep shows bright and clear on my TU.

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Can confirm that Alliant does report to all 3.

[Anonymous]

In February of last year I took out a $2050 secured loan with a 24 month term. It definitely had a positive impact on my scores, but I was sitting at the mid 600's at the time. My hunch is that the lower the scores the greater the impact, and inversely the higher the scores the lesser the impact. If I were already at the 730 the OP mentions, I wouldn't bother.

[gercredit]

Thanks everybody for the input, still thinking about it

[jamie123]

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@gercredit wrote:
That was my feeling as well. 730 is not too bad but I wanted to be in the 750 and above range. I am thinking about applying for a mortgage in 1-2 years and I have the feeling that a loan on the file would help.

I am currently thinking about a 1.000$ loan which would roughly lead to 20$ interest.

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Getting a secured loan is a very smart move on your part.

A lot of members here focus on only the scores but when you apply for a large loan like an auto loan or mortgage the lenders will be focusing on scores AND history. Both mortgage lenders and auto loan lenders like to see installment loan history on your reports and by having an open installment loan on your reports you will gain some points.

The dollar amount of the shared secured loan doesn't matter as far as scoring is concerned. Lenders do however usually have a $500 minimum and with longer term loans requiring a larger loan of say $1000.

[gercredit]

Quick last question, is Alliant still pulling Equifax?

[CreditDunce]

I am not sure who Alliant pulls.  But everyone says it is a SP for a share secured loan.  I wouldn't worry about who they pull.

I am not a big supporter of getting shared secured loans to boost your score.  However, if your FICO 04/98 scores are below 760 and you don't have any open installment loans, it is a good idea for you.  Get the $500 shared secured loan with a 4 year term.   There may be a small bonus for having two shared secured loans, but I think one is enough.  Don't do anything else for the next 1-2 years.  Just keep your CC utilization reasonable. At mortgage time, you do not want any revolving CC debt.   When you are ready to apply for the mortgage, pay down the shared install loan to maybe $50.  Just make sure the loan is not paid off before you close on the mortgage.

Larger shared secured loans may look better under manual review (FICO doesn't care).  However, larger loans also hurt your DTI more.   They may exclude the loan in your DTI if it is close to being paid off, but it is better to have next to no debts before applying for a mortgage. 

Good luck!

PS.   If there is a CU you are thinking about getting the mortgage with, it might be wise to join now.  For example, if you are looking at a PenFed mortgage, they HP your credit to join.  If you join now, you can build history with the CU and the HP/INQs will be over 1 year old before house hunting.

[Anonymous]

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@gercredit wrote:

Quick last question, is Alliant still pulling Equifax?

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EQ soft pull for me. The lady I spoke to on the phone actually told me the score (713) which didn't match anything I had at the time, so it must have been some variety of bankcard enhanced.

[Anonymous]

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@CreditDunce wrote:

I am not sure who Alliant pulls.  But everyone says it is a SP for a share secured loan.  I wouldn't worry about who they pull.

I am not a big supporter of getting shared secured loans to boost your score.  However, if your FICO 04/98 scores are below 760 and you don't have any open installment loans, it is a good idea for you.  Get the $500 shared secured loan with a 4 year term.   There may be a small bonus for having two shared secured loans, but I think one is enough.  Don't do anything else for the next 1-2 years.  Just keep your CC utilization reasonable. At mortgage time, you do not want any revolving CC debt.   When you are ready to apply for the mortgage, pay down the shared install loan to maybe $50.  Just make sure the loan is not paid off before you close on the mortgage.

Larger shared secured loans may look better under manual review (FICO doesn't care).  However, larger loans also hurt your DTI more.   They may exclude the loan in your DTI if it is close to being paid off, but it is better to have next to no debts before applying for a mortgage. 

Good luck!

PS.   If there is a CU you are thinking about getting the mortgage with, it might be wise to join now.  For example, if you are looking at a PenFed mortgage, they HP your credit to join.  If you join now, you can build history with the CU and the HP/INQs will be over 1 year old before house hunting.

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Unless it's an interest only loan. That's the beauty of mine. It reports with a monthly payment of $5, which has virtually zero impact on DTI. I did an amortization table over the 24 months, and pay $89 a monh on it.

[gercredit]

This is an interesting comment in regards to open vs closed loan at mortgage application.
I would have thought exactly the opposite, making sure that the loan is paid off before applying for a mortgage.
Can somebody please explain why an open loan would be better?

[Anonymous]

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@gercredit wrote:
This is an interesting comment in regards to open vs closed loan at mortgage application.
I would have thought exactly the opposite, making sure that the loan is paid off before applying for a mortgage.
Can somebody please explain why an open loan would be better?

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If the loan is closed, you may get hit for a score drop for once again having no open installment loans If they are really being silly let them make it a condition of the mortgage that the loan be paid at closing, tho I kinda doubt a 500 dollar 4 year loan is gonna hold ya up.