TimeOnMySide wrote:Hello...I'm trying to get a mortgage. I'm not sure if I should open a secured $500 loan with my credit union. Payable for 6 months with 5.25% interest It will cost me 1 inquiry only to TU. I have heard this is a good way to increase your score provided you pay on time each month (which I definitely will). I confirmed they report to EX, TU, and EQ.
I have 3 open accounts that have been current 7 months. 2 have late pays up to 90 days old in the last 24 months (student loan and car note opened in 2000 and 2006). The other is a CC opened 10/2009 never late.
Not sure if I need to open another installment loan. Now I understand having a mix of credit is best. This secured loan would be my 3rd in that category. Any advice. I included my scores if that helps.
My EQ = 486. Mostly due to lates pays/CO. But there are several errors (baddies that aren't mine, getting those removed). My TU is 550 (more accurate than EQ).
Personally, I'd recommend against it. First, installment accounts don't have nearly the the same score impact that revolving accounts do. Second (and more important than the first) if you're trying to get a new mortgage any time within the next year, you should probably stop apping for new credit. Thirdly, if you already have an installment loan (auto) you don't need another to enhance your mix of credit. You'd only be lowering your AAoA and paying interest-- money right out of your pocket for little to no gain.
You're going to get the most bang for your buck by working on those baddies. You've noted that you've got some inaccuracies. Tackle those first. You've also got derogs... There is where you need to focus the lion's share of your attention to get raise your score! Goodwill & PFDs is where you'll want to spend your money. 
Good Luck!
