Will paying off Alliant SSL boost my score?

[NRB525]

No, OP, you aren’t listening. The Alliant trick is no longer available. There is no way to reproduce the $44 balance on the $500 that sits still like that for years. All gone.

As to the other comment about “no benefit from the SSL”, apparently it has been a while since we saw the regular march of posts lamenting loss of points when the last installment loan, usually an auto loan, paid off. How soon we forget. There IS a big score drop waiting for OP when both the Alliant and lease go to paid off.

[Anonymous]

My comments in blue below.

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@toadsworthwrote:
Thanks for the input guys; when my SSL hits one year from being done, I’ll probably get a $500 unsecured loan from Alliant as the paying it down early trick still works with them. Then once it’s on autopilot and correctly reporting at $44 I’ll pay off the original one.

You propose adding a new SSL 12 months before the current one is paid off.  I am guessing that is because you think it might take 11-12 months to get it reporting properly.  That's overkill.  90 days is fine.  And of course you may already have an installment loan at that time, e.g. a car lease or a car loan or a mortgage (etc.) -- in which case there is no value in adding another SSL.

Actually now I have another question for the experts out there. Since we are talking about how this affected my installment utilization; would it provide a bigger boost/buffer if I did a larger loan and paid it down right away next time?

From the Share Secured Loan thread (that I suggested you look at earlier):

Does the size of the loan matter?

No.  A $500 loan works just as well as a $10,000 loan.  Almost everyone chooses a small loan amount.

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[toadsworth]

I thought I’d read somewhere on here that while the SP SSL isn’t available from Alliant, the paying it early trick works with their unsecured loan as well.

Good to know that I only need like 90 days or so; I’ll set a reminder (:

Also, I know that the amount of the loan doesn’t matter in terms of the scoring boost it brings for having an installment account and for having it report at under 9% but I’m wondering if it would be an effective utilization buffer for all of my installment accounts? For example if my current Alliant SSL had been $10,000 instead of $500 then my combined installments util between my car and the SSL would be closer to 35%.

[Anonymous]

Yeah, you could indeed get some marginal help with your TIU (total installment utilization) by taking out a huge loan and paying it down.  For the benefit of others reading this post, a clearer example is taking out a one million dollar loan and paying it down to $100 at Day 5.  Then you could buy a 60k car and still have a TIU < 8.9%.

In practice, however, it is very difficult to get the huge amount loan amount(s) needed to realistically offset other "real" loans.  A better strategy is to simply buckle down and pay off existing loans faster and then put a $500 SSL (using the paydown technique) in place shortly before all existing loans (cars, etc.) are paid off.

Of course accelerating payoff schedules of existing loans only is right if it makes sense financially.  It's a bad move if you have credit card debt, or if you think you can do better by placing the cash into a Roth IRA or similar vehicle.

[NRB525]

From the comments, I think I may be missing a subtle part of the discussion about the SSL.

The Alliant SP SSL is indeed gone, correct? So the quiet way to get to $44 of $500 reporting is no longer available. I think that part I get.

It sounds like a HP term loan is available, meaning an applicant could take a HP, get a $500 Alliant term loan, pay that to $44 of $500 and let that sit. The HP fades in a year and the benefit runs for near 5 years.

Do I have that right?

[Anonymous]

Hey NRB.  That's it exactly.

I think what our OP proposed earlier was getting an unsecured loan with Alliant and then paying it down.

I have been using the term SSL broadly simply to mean anyone using that technique (getting a small loan and ten paying it down but keeping it open).  An unsecured loan is only a drawback if a person thinks he might not get approved or if an inquiry is a big deal.

I have also been using the term SSL because I am confident that we will find true SSL alternatives to Alliant by this summer.

[toadsworth]

Yes, in the Alliant thread it is mentioned that if you qualify for it, the unsecured loan (requires HP) still has the ability to be paid down early, pushing the next payment date out by years. Not exactly good for rebuilders but still useful if someone with a better profile needs an installment account.

[NRB525]

Ok, in that case may I suggest editing a new paragraph into the lead post of the Credit Topics SSL thread? To clarify that the SP SSL is not available, but the second option of using a HP to go unsecured is available? Then folks can make the choice to use a HP, which fades in 12 months, to set up the benefit for 5 years? Right now it looks like no such option exists, unless one diligently reads through all the posts in the thread.

[Glen_M]

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@NRB525wrote:
...
The Alliant SP SSL is indeed gone, correct?


So the quiet way to get to $44 of $500 reporting is no longer available. 

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Yes, and No.

While Alliant no longer offers that loan, other institutions still do.  They may just have some additional caveats.

[Anonymous]

Thanks for the suggestion, NRB.  It was included in the Quest for An SSL Alternative To Alliant:

http://ficoforums.myfico.com/t5/General-Credit-Topics/The-Quest-for-an-SSL-alternative-to-Alliant/td...

It's Post #2: CUs/Banks that work for sure (though they may not be perfect).  The two we know of currently are Navy Fed (a true SSL) and Alliant (an unsecured loan).

My own work life has been crazy and I have not had time to do a lot of research on different banks in the last three weeks.