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Amex personal loan

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Anonymous
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Amex personal loan

I received an offer for an Amex personal loan of $25K. I don't need the funds for the loan right now but one of my questions pertains to how the FICO score would be affected if I applied and was approved for it. I see one of the FICO score parameters for excellent credit availability is $50K and up. I  say this because I use the Capital One simulator often and it does it raise it. By taking this loan it will certainly put me over this threshold and assume raise my scores. It appears the personal loan has a lower interest than the actual credit card itself. which is good.  The offer says it won't affect the credit scores negatively which I assume means they won't hard pull.

Has anyone used this as a way to leverage your total credit availability thus raising your score? Thanks for the input. 

Message 1 of 8
7 REPLIES 7
Anonymous
Not applicable

Re: Amex personal loan

Your amount of available credit is NOT a factor in your FICO scores.  Different "fluff" software like CK or other monitoring services may lead you to believe this is true, but it's not.  This is true of revolving credit AND installment loans.

 

You taking out a $25k loan with Amex is no different than taking out a $500 share secure loan with Alliant.  They will both be scored as installment loans and your score would actually be higher with the SSL as you'd be able to pay it down to 9% immediately and get maximum FICO points where with the $25k loan I assume you'd be at much higher utilization for a length of time. 

 

Do you have any open installment loans currently?  If not, I highly recommend the SSL technique as it will grab you about 30 points almost right away (when it reports).

 

Definitely stay away from that personal loan, IMO, as it will not accomplish what you are looking to do at all.

Message 2 of 8
Anonymous
Not applicable

Re: Amex personal loan

Thanks. The only thing I have besides credit cards is the NFCU CLOC for $15K and I haven't used it. Would that be classified as an installment loan? 

 

Message 3 of 8
Anonymous
Not applicable

Re: Amex personal loan

I would think so. If you look at your credit report see how it is coded. If it says installment loan, that's how it's being considered for scoring. If it suggests it's revolving, it isn't seen as a loan. I've never had a LOC so I'm not well versed on them.
Message 4 of 8
SouthJamaica
Mega Contributor

Re: Amex personal loan


@Anonymous wrote:

Thanks. The only thing I have besides credit cards is the NFCU CLOC for $15K and I haven't used it. Would that be classified as an installment loan? 

 


No it's not coded as an installment loan, it's listed under "Revolving and Open-Ended Accounts", a separate category from "Installment Accounts".

 

The loan will do you no good. If you want to improve your scores with an installment loan, use the SSL technique suggested by BBS.


Total revolving limits 741200 (620700 reporting) FICO 8: EQ 701 TU 704 EX 685

Message 5 of 8
Anonymous
Not applicable

Re: Amex personal loan


@Anonymous wrote:

Your amount of available credit is NOT a factor in your FICO scores.  Different "fluff" software like CK or other monitoring services may lead you to believe this is true, but it's not.  This is true of revolving credit AND installment loans.

 

You taking out a $25k loan with Amex is no different than taking out a $500 share secure loan with Alliant.  They will both be scored as installment loans and your score would actually be higher with the SSL as you'd be able to pay it down to 9% immediately and get maximum FICO points where with the $25k loan I assume you'd be at much higher utilization for a length of time. 

 

Do you have any open installment loans currently?  If not, I highly recommend the SSL technique as it will grab you about 30 points almost right away (when it reports).

 

Definitely stay away from that personal loan, IMO, as it will not accomplish what you are looking to do at all.


Thank you. I just read the thread on installment loans and I now understand where you're going as it relates to FICO scoring. Does Alliant HP forl a secured loan. I have about 8 inquiries right now and waiting for them to purge before I utilize more credit. I don't want to keep amassing inquiries when I have a few coming off this year. 

Message 6 of 8
HeavenOhio
Senior Contributor

Re: Amex personal loan

It's a soft pull. The only negative would be the decreased AAoA and AAYA. But that's more than offset by having the mostly paid down loan.

Message 7 of 8
Anonymous
Not applicable

Re: Amex personal loan


@HeavenOhio wrote:

It's a soft pull. The only negative would be the decreased AAoA and AAYA. But that's more than offset by having the mostly paid down loan.


Very true.  You may lose 5-10 points for the "new account" and AAoA reduction, but you'll gain 30 for the installment loan so you'll still net a 20-25 point gain.  And, the 5-10 points "lost" will come back in 6 months tops as the "new account" is no longer considered new and your AAoA gets back to where it was (if it even dropped enough to result in a threshold being crossed).

Message 8 of 8
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