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Credit loop hole or bust?

Valued Member

Credit loop hole or bust?

Get a personal loan for let us say $1000 make the minimum payment the first payment and pay it off with money received from the personal loan.

 

In addition, having a secured credit card of balance of $500 and pull out $100 of the ATM and putting it back in the account the next day.

 

Would it work reporting and building my limit?

Message 1 of 13
12 REPLIES
Regular Contributor

Re: Credit loop hole or bust?

I don't believe this would help you much. First off, it's the long payment history that makes the personal loan worth it. If you make one payment and then pay it off, it can only help you for one month. Plus, you'd still be charged interested on the loan, and probably some "fees", too.

 

Withdrawing money from your card and putting it back in might help some, but it's a good thing to carry at least a small balance on a card each month. I believe the ideal util number is.. 8.9% or something like that?

 

Nothing beats actually using your cards and paying them down to around that magic utilization number before your statement hits as far as I know. That will let your score grow as well as your limits.

06/2017 FICOs: TU: 542 EX: 538 EQ: 528
07/2017 FICOs: TU: 564 EX: 564 EQ: 559
08/2017 FICOs: TU: 598 EX: 597 EQ: 584
09/2017 FICOs: TU: 621 EX: 615 EQ: 608
09/2017 FICOs: TU: 633 EX: 620 EQ: 608
Message 2 of 13
Community Leader
Valued Contributor

Re: Credit loop hole or bust?

You could do that with a personal loan, but there really isn't a point in doing that. The first month it reports you'll get some points for adding a loan to your credit mix (if you dont have one already) which could be offset by losing points for lowering you AAoA. The next month it would report as closed which would cause a score drop from not having a loan in the credit mix (again assuming that you dont have another). So point wise it wouldn't help and you'd still have interest and possibly fees to pay also. Basically, you'd be paying to be in the same spot. As for doing the cash advance, I wouldn't do it. Interest starts immediately and depending in the card it could take up to a week for the payment to post. So you'd be getting interest added while waiting for the payment to post. Just use the card normally. Thus is a marathon not a sprint.
Message 3 of 13
Valued Member

Re: Credit loop hole or bust?

I've been using my capital one secured credit card. $300 limit.
Used $40. Waited for statement came in the mail. Paid the minimum amount $25 and let it post the payment. Then paid the rest off a week later. Am I doing this right? Finically I'm broke. We are low income now because of the investments. I can't afford to buy things until next June. Ok so what about an installment loan of $2000 and put $1,800 or $1,900 back on the loan and make very small payments for 1 to 2 years. We are trying to build up our fico before we buy a house next year. We will have money next year.
Message 4 of 13
Valued Member

Re: Credit loop hole or bust?

Also there hasn't been any interest on my capital one yet so idk I'm using it weong
Message 5 of 13
Community Leader
Valued Contributor

Re: Credit loop hole or bust?

Using the Cap1 card that way is good and won't get interest. But don't let more than $27 go on the statement. That will give you the best score tou can get right now for the card. As for the loan, search this site for the secured share loan from Allaint. That will cover what you want to do. And you'll only need $500 for it. What are your current Fico scores? Because for optimal scoring when you apply for a mortgage you'll need at least 3 revolving accounts. Are there any derogatory items on your reports?
Message 6 of 13
Valued Member

Re: Credit loop hole or bust?

credit karma says 591 for trans and 597 for equifax. Not Even sure. I did a real credit report on june 18th all where in the 520's fico around 520. 

Just checked my fico and its 552 now. 12 medical just came off on trans and experian, still waiting on equifax.  

 

1 account with a 30 day late. Which is in disbute. Child support sent out a bill 1 1/2 after we went to court and by that time it was already late. Bullcrap. 6 credit inquires which 2 i didnt run. So i will have to disbute. 14 collection accounts all but 1 are medical because my exwife put all the bills to her address and i was out of state at the time. She used my medical card and never paid. 1 state tax lien on jun 26th 2016 so im not sure if their going to remove it or not.

 

I have 8 accounts all never late one payment in 11 years.

 

I have a credit repair person for 6 months. But know ive learned all the letters etc how to disbute it.

 

I have one installment plan for a car but will be paid off in feb 2018 $1900 left

I have a month old capital one card that hasnt reported yet. $25/$300

I have a freshstart fingerhut account of $180.  $30/180                              paying off and using it in couple of months to get my limit up.

 

So im worried that when the car is paid in full on feb when i buy a house in june or july that it wont show any installments that my score will drop.

 

applied for a secured discovery card and was declined 2 months ago.

 

What else do you think i should do.

 

I thought about the victora secret store card hack.

 

Thoughts Thank you Jeff

Message 7 of 13
Valued Contributor

Re: Credit loop hole or bust?

Just pay everything when they are due. You will technically be one month behind but we are looking to build many months of History. No need to micromanage when you only have a couple of tradelines. If you're using a $300 secured card to make a $200 cable bill then yes knock that thing down before a statement cut of course.
Open one, close three. Open one, close three.
Message 8 of 13
Regular Contributor

Re: Credit loop hole or bust?

This would bring down your AAoA and does nothing to demonstrate how you are at repaying loans over a period of time.

 

Pulling 100 out of an ATM is considered a cash advance so there will be cash advance fees and depending on the UW deciding a CL increase or going to unsecured it could draw flags to them.   I would suggest keeping a good UTL with purchases that will be paid off to keep it cycling.

 

 

Starting Score: May 23, 2016 EQ 537 TU 518 EX 548
Recent Score: November 29 2017 EQ 710 TU 680 EX 706
Goal Score: 720
Current Vantage 3.0: 706
Mortgage Scores August 18 2017: EQ5 684 TU4 692 EX2 690
Message 9 of 13
Valued Member

Re: Credit loop hole or bust?

I use the secured card for gas once a month. Get the statement make minimum payment then wait a week and pay off the balance. At the end of the month I'll have enuff for another secured credit card. Should I just use $200 on this $300 to open the other one and pay it off the $200 at the end of the month?  Also what's that the name of the loan that you don't get any money. You pay ever month and then after the end of the term you get the money.

 

thanks guys

Message 10 of 13