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The right installment loan amount.

Contributor

The right installment loan amount.

Ive been doing some research on the alliant secured loan as I have no installment loans and feel this can boost my fico. I was on CK's simulator and entered the personal loan amount of 500 to see what it might do to my score. The lower I went in amount, the higher it got. I was down to 50 bucks and it still kept going up. I realize this is not a reflection of what will actually occurr but it got me thinking. Has anyone ever gotten a small secured loan for 100 or 200 bucks and seen a good increase? Could it be this lower amount might yeild a  higher score increase? 

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Re: The right installment loan amount.


steelholder wrote:

Ive been doing some research on the alliant secured loan as I have no installment loans and feel this can boost my fico. I was on CK's simulator and entered the personal loan amount of 500 to see what it might do to my score. The lower I went in amount, the higher it got. I was down to 50 bucks and it still kept going up. I realize this is not a reflection of what will actually occurr but it got me thinking. Has anyone ever gotten a small secured loan for 100 or 200 bucks and seen a good increase? Could it be this lower amount might yeild a  higher score increase? 


As near as we've been able to determine the size of the loan is irrelevant to scoring (might not apply to underwriting but we don't have visibility into that).  It's simply the ratio of current balance to original balance in aggregate for all loans.

 

If you can get a $100 share secured loan go for it, but in practice it's probably a minimum of $250 in the lenders I looked through, and if you use Alliant even with $500 if you pay it down immediately they release the funds and only hold 2X current balance.  So in my case with a loan now at $20/$500 I'm tying up $40, not a big deal so at least in this place in life size doesn't matter.

 

In general I would suggest length of loan matters more, but Alliant is a known good quanity that's worked for hundreds of forum members over the last few years, and other than maybe Penfed which should work similarly with a friendly pay-ahead model as well, but I have little interest in testing anything beyond Penfed personally though that may be because I have a mortgage on my account making the SSL kind of irrelevant other than tradeline farming.

 

Note: this is FICO we're talking about, and in general relying on simulators is really a bad idea as I am 100% confident the developers of said simulators aren't reading this for similar forums about algorithm implementation.  I definitely wouldn't trust the CK simulator on this one, and it's probably attempting to optimize something which isn't FICO anyway, which makes little sense in today's market.

Starting Score: EQ 5 561, TU 98 567, EX 2 599 (12/30/11)
Current Score: EQ 5 771, TU 4 758, EX 2 758, EQ 8 795, TU 8 762, EX 8 786 (7/28/17)
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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