03-18-2013 08:28 PM
I am thinking of getting a 12 month $5,000.00 secured loan only to help my credit. I do not want to keep it for the full 12 months. I'd like to pay it back ASAP. I am thinking about paying $1,000.00 a month back for 5 months or even more. If I did get this secured loan and paid it back within 3-5 months, is that too early? Do I need to keep the loan going longer?
03-19-2013 04:46 PM
There may be some in here who might disagree, but installment loans really don't help your FICO. There are plenty of examples in here of folks hitting 800 FICOs with no loans reporting, not even a mortgage. Per FICO, if you do get a loan, the balance doesn't matter. Also paying it off sooner rather than later doesn't matter to your score. You might see a ding when it gets added, but much of that will disappear inside a year, if not all of that.