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Registered: ‎12-30-2011
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Re: Adding an installment loan -- the Share Secure technique


yapsalot wrote:

Hi Revelate!

 

Followed the procedures for opening the Alliant savings account and it went very smoothly. Opened the installment account as well, again going very smoothly, thanks to the detailed instructions. Got an additional bonus too. Alliant is paying 1% on savings, which is double my existing bank's rate, so switched my savings to them as well. The rep was very friendly when I spoke to him by telephone to confirm the loan and they have great terms: free ATM's in their network and for machines outside of their network, they reimburse up to $20.00 per month for ATM fees.

 

Paid down the Alliant installment account immediately after opened and now the site shows my next payment due something like four years from now. Will wait till the first automatic withdrawal happens to cancel future auto payments.

 

Opened two card accounts with Amex, one with Discover and one with Chase. So now will have an installment loan and a total of 4 new revolving accounts reporting soon to improve my FICO score. Took a slight hit on my current FICO score with EX for the inquiries which I see as a small price to pay for the benefit of getting the additional credit lines reporting. Alliant did not do a hard pull even though they disclose in opening the account that they will obtain a credit report.

 

Thanks again!


Well played senor!  That's a darned nice setup.

Starting Score: EQ 5 561, TU 98 567, EX 2 599 (12/30/11)
Current Score: EQ 5 688, TU 4 758, EX 2 703, EQ 8 728, TU 8 762, EX 8 739 (6/12/17)
Goal Score:    EQ 5 750, TU 4 750, EX 2 750, EQ 8 800, TU 8 Blah, EX 8 800 (01/01/18)


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Re: Adding an installment loan -- the Share Secure technique

I have a school loan of about $538 left is this method still good for me? Just want to make sure thanks

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Re: Adding an installment loan -- the Share Secure technique


artist wrote:

I have a school loan of about $538 left is this method still good for me? Just want to make sure thanks


If the school loan has enough of a term left on it sure.  Basically the goal is to get your aggregate installment loan balance under 9% roughly, less but not paid off is fine.

 

Assuming that is your last installment loan though, I would want to get another on my reports and use this method so that when it falls off I didn't take an unnecessary hit to my score.

Starting Score: EQ 5 561, TU 98 567, EX 2 599 (12/30/11)
Current Score: EQ 5 688, TU 4 758, EX 2 703, EQ 8 728, TU 8 762, EX 8 739 (6/12/17)
Goal Score:    EQ 5 750, TU 4 750, EX 2 750, EQ 8 800, TU 8 Blah, EX 8 800 (01/01/18)


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Posts: 97
Registered: ‎04-25-2016
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Re: Adding an installment loan -- the Share Secure technique

I pay $38 a month so I have a little over a year left on it. Thanks I will update on my progress. I was going to go with my credit union from my job but this looks better since it has 1% interest on savings. 

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Re: Adding an installment loan -- the Share Secure technique


artist wrote:

I pay $38 a month so I have a little over a year left on it. Thanks I will update on my progress. I was going to go with my credit union from my job but this looks better since it has 1% interest on savings. 


What was the original balance on the SL?  If it's federal you can use the same trick as we do with Alliant according to their written documentation as well but with only a year left on it, it will be discounted shortly.

 

In your case the share secured loan will prevent you from taking a drop when you pay off the student loan, but you've probably maxxed out the installment utilization portion of the scorecard anyway unless your student loan was fairly small to begin with.

Starting Score: EQ 5 561, TU 98 567, EX 2 599 (12/30/11)
Current Score: EQ 5 688, TU 4 758, EX 2 703, EQ 8 728, TU 8 762, EX 8 739 (6/12/17)
Goal Score:    EQ 5 750, TU 4 750, EX 2 750, EQ 8 800, TU 8 Blah, EX 8 800 (01/01/18)


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Re: Adding an installment loan -- the Share Secure technique

[ Edited ]

My student loan was $4000 and yes it is Federal. Is it a good idea to have both open at the same time? Should I pay off the student loan early?  As for the $10 donation do you donate first then join or leave that extra $10 in the account and let them take it out? I am seeing people leave the extra amount in the account just wondering why? Thanks

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Re: Adding an installment loan -- the Share Secure technique

Hello Artist.  When I went through the Alliant process a month or two ago, I clicked on OPEN AN ACCOUNT NOW and then was asked as part of the process to establish eligibility.  Bottom line for most people is:

     Click on OPEN AN ACCOUNT NOW

     then you will donate $10 to the nonprofit (I think I just opened a seperate tab in my browser)

     then you will return back to the account opening process

     finally you will fund your new savings account with more than $501 in preparation for applying for the loan.  I suggested $510 just because it seemed a simple round number.

 

See step 1 in Implementing the SS Loan Technique: Step By Step for the full details.

 

As far as your student loan vs. SS loan questions, I see no particular advantage in paying off the student loan early.  Unless you are paying a ton of interest each month, which I seriously doubt is the case.

 

Just allow the student loan to gradually pay off, and 3-4 months before the last paymment, set up a 60 month SS loan with Alliant and pay it down.

 

I know of no particular advantage in having both a student loan and a personal loan open at the same time.  I suppose it is conceivable that FICO's hidden proprietary model might give you a couple points but there's no evidence that this is the case from either test data or published FICO literature.  But surely that's an academic question?  Even if there was a tiny advantage, the period of time where you'd have both open is very short, so it shouldn't matter to you I don't imagine.

 

You may want to go back and carefully read the second post in this thread (The Theory Behind The Technique -- or Why It Works).  Your intial posted questions suggest that you may not have fully understood it, e.g. the relationship between total loan debt currently owed and total original amount of the open loans. 

 

Delighted that you are interested in the technique, and very best of luck.

Contributor
Posts: 97
Registered: ‎04-25-2016
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Re: Adding an installment loan -- the Share Secure technique


CreditGuyInDixie wrote:

Hello Artist.  When I went through the Alliant process a month or two ago, I clicked on OPEN AN ACCOUNT NOW and then was asked as part of the process to establish eligibility.  Bottom line for most people is:

     Click on OPEN AN ACCOUNT NOW

     then you will donate $10 to the nonprofit (I think I just opened a seperate tab in my browser)

     then you will return back to the account opening process

     finally you will fund your new savings account with more than $501 in preparation for applying for the loan.  I suggested $510 just because it seemed a simple round number.

 

See step 1 in Implementing the SS Loan Technique: Step By Step for the full details.

 

As far as your student loan vs. SS loan questions, I see no particular advantage in paying off the student loan early.  Unless you are paying a ton of interest each month, which I seriously doubt is the case.

 

Just allow the student loan to gradually pay off, and 3-4 months before the last paymment, set up a 60 month SS loan with Alliant and pay it down.

 

I know of no particular advantage in having both a student loan and a personal loan open at the same time.  I suppose it is conceivable that FICO's hidden proprietary model might give you a couple points but there's no evidence that this is the case from either test data or published FICO literature.  But surely that's an academic question?  Even if there was a tiny advantage, the period of time where you'd have both open is very short, so it shouldn't matter to you I don't imagine.

 

You may want to go back and carefully read the second post in this thread (The Theory Behind The Technique -- or Why It Works).  Your intial posted questions suggest that you may not have fully understood it, e.g. the relationship between total loan debt currently owed and total original amount of the open loans. 

 

Delighted that you are interested in the technique, and very best of luck.


I've already opened an Alliant account and donated. Since there is no advantage I guess I will just wait 3-4 months before my student loan is paid off to get the 60 month loan. I'm assuming it will still work. 

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Registered: ‎07-17-2014
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Re: Adding an installment loan -- the Share Secure technique

Sounds fine.  If you think you will rest easier by having the SS loan in place sooner, there is certainly no drawback to doing it now, except for the fact that a 60-month loan opened in June 2016 will close earlier than one opened (say) in Feb 2017.  Simply because the clock started ticking sooner.

 

If, however, you have a particular big credit need coming up (like a house,) and you are certain it will be well before 60 months from now, then feel free to do the Alliant loan as soon as is comfortable.

Valued Member
Posts: 28
Registered: ‎04-04-2016
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Re: Adding an installment loan -- the Share Secure technique

If I remember correctly when I signed up with Alliant I indicated I was a member of LIfetime Fitness which I am.  That allowed me to sign up without having to donate $10.  They did not ask for any sort of verification that I was an actual member of LIfetime Fitness.

 

I am by no means an expert at all at FICO scoring but seeing the cost of the Alliant loan is so low and it seems like age of credit accounts does matter for your score, you may consider opening it up as soon as possible so that your account is as old as possible, but that may not matter that much (if it matters at all) but it is worth mentioning.  

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