secured loan

[Anonymous]

I'm looking to open one up with 1k for 12-24 month. What are the pros & cons of doing this?

[RobertEG]

What is the nature of your concern, the impact of a loan on your scoring, or the fact that the loan will be secured?

[Anonymous]

I am thinking about getting a secured loan as well. Will it be any help for the next two years scorewise? 

[gdale6]

If you are thinking about this just for Fico purposes, forget it. There are very few points to be gained in this strategy, installment loans are not where the bulk of the action is. You want revolving cards and I would put that money to use with secured cards if you cant get unsecured.

[Anonymous]

I get the concept, but then I don't. I'm looking to open it with dcfcu in Florida. I was told I would have to put 111% of it into a savings account. So1000=1110.I don't understand why $1110.I was also told the intrest rate would be 2.5%

[Anonymous]

So I just called back for more information. If I do 1k.I would deposit 1,110 & they would hold it. I would then have to make payments of 1,110 which they would keep & I would get the 1,110 they held in the account at the end of the term. If this how the works? They will make 1k of me

[gdale6]

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@Anonymous wrote:
So I just called back for more information. If I do 1k.I would deposit 1,110 & they would hold it. I would then have to make payments of 1,110 which they would keep & I would get the 1,110 they held in the account at the end of the term. If this how the works? They will make 1k of me

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They are securitzing the interest they will earn on over the life of the loan and most likely the credit life insurance fees upfront as well thats what it looks like to me. You will make payments that equal 1110 over the life of the loan, they dont make that over the life of the loan. Read all documents carefully though and ask the credit manager questions if you dont understand something.

[Anonymous]

My question here is, do you have an auto loan or student loans you are currently paying? If so, forget the secured loan, you don't need it. FICO only needs one installment loan for credit mix, and as other have pointed out - its really not a lot of points, just 10% of your score. 65% of your score OTOH, is credit utilization and payment history - likely lots more opportunity for points there.

[Anonymous]

I've never had an installment loan

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@Anonymous wrote:

My question here is, do you have an auto loan or student loans you are currently paying? If so, forget the secured loan, you don't need it. FICO only needs one installment loan for credit mix, and as other have pointed out - its really not a lot of points, just 10% of your score. 65% of your score OTOH, is credit utilization and payment history - likely lots more opportunity for points there.

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[Anonymous]

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@gdale6 wrote:

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@Anonymous wrote:
So I just called back for more information. If I do 1k.I would deposit 1,110 & they would hold it. I would then have to make payments of 1,110 which they would keep & I would get the 1,110 they held in the account at the end of the term. If this how the works? They will make 1k of me

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They are securitzing the interest they will earn on over the life of the loan and most likely the credit life insurance fees upfront as well thats what it looks like to me. You will make payments that equal 1110 over the life of the loan, they dont make that over the life of the loan. Read all documents carefully though and ask the credit manager questions if you dont understand something.

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They make $110 + the 2.3% on the 1k loan. I branch manager finally explained it to me. That's why they want 111% of the loan deposited.