Rebuilding Post BK/Installment Loan

[Anonymous]

Hello, my chapter 7 bk was discarged on 6/6/17. I applied for and obtained a crappy credit one card with a $300 limit that I activated today.
I have the opportunity to take out an installment loan (super high interest of course) with Affirm credit for a guitar purchase (i'm a gigging musician) in the amount of $1250.00. My question to the experts out there--is this a good idea??? Will this installment loan help my credit score or hurt it? The loan term is for 1 yr. and I can most likely pay that off early.
I don't want to take out a loan that might hurt me, i'm just trying to rebuild and I'm told that an installment loan in addition to good payments on my credit one card (i intend to use it for very small purchases and pay off in it's entirety each month) will help my credit score.
Any advice?
Thank you!!!
 
**edit--i just took out a 1yr $550 loan with selflender.com. it's a typical rebuilder type loan where i pay monthly payments and at the end of the year I get the $550. For those in the know, will taking out the above loan with Affirm still be a good idea so that I can have 2 installment loans reporting or should I just leave it be? I don't really need the guitar but I can afford the payments and I really want to re-establish credit.

[rmduhon]

1 instalment loan is all that is necessary for a credit mix. I'd avoid the Affirm loan if I was you. No need to pay high interest on something just to build credit.

[RobertEG]

If they do a hard pull, that wil affect scoring for one year.

If approved, the loan will begin with 100% remaining of initial balance, and will have a zero age when included in your AAoA calculation.

Since you already have an installment loan, it wont help your mix of credit.

That, in addition to the interest you will pay, would likely lead me to pass.

[Anonymous]

Thank you. I understand the negatives particuarly in the short run. But I am at the very beginning of the rebuild so shouldn't i have to expect that balances will be 100% at this stage, etc.? I guess I'm hoping that in a year or less (i plan to pay off early at like 6-8 months) that I would reap the rewards from this and not today.

Any thoughts?

[rmduhon]

Paying off a loan will cause score drop so that won't help any. You'd be better off working towards getting 2 more cards to help utilization and to avoid the penalty of having all your cards reporting a balance and the penalty for having no cards reporting a balance. With only 1 card you'll get penalized either way.

[Anonymous]

**bleep**, I thought having an installment loan or two and paying on time every single month or maybe even paying more than the minimum was a good thing? so this will actually hurt my credit score to have paid off two loans on time?