Will this help my score?

[Anonymous]

I've been weighing whether to get a medical loan (Cap1) for a non-covered medical procedure that will cost $30k or so.  I figure it will hurt as such as it will be new credit and a chunk of it (deb to income, etc.)

However, it is possible I can get that amount as an advance from work.

I'm thinking perhaps to get the Cap1 Loan, pay for 1-2 months, then get the advance from work and pay that in full.

Will that help at all?  A paid high line installment loan?  Once paid will the 'new' stop hurting and the PIF help?

[Anonymous]

Sounds like it will only hurt your history. 1-2 months of payment history doesn't seem like it will help in the long run. And won't there be interest on top of the Cap One loan?

[Anonymous]

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@Anonymous wrote:
Sounds like it will only hurt your history. 1-2 months of payment history doesn't seem like it will help in the long run. And won't there be interest on top of the Cap One loan?

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Well it will be a $30k loan taken and paid in full.  Even if I take the interst-bearing loan it will only be two months of interest, however Cap1 has interest free loans if you qualify and pay in under 18 months.

I'd think it would show up as large loan approved, pre-paid early.

[haulingthescoreup]

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nyccc2 wrote:

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@Anonymous wrote:
Sounds like it will only hurt your history. 1-2 months of payment history doesn't seem like it will help in the long run. And won't there be interest on top of the Cap One loan?

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Well it will be a $30k loan taken and paid in full.  Even if I take the interst-bearing loan it will only be two months of interest, however Cap1 has interest free loans if you qualify and pay in under 18 months.

I'd think it would show up as large loan approved, pre-paid early.

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No brownie points for pre-paying loans.

You want to have at least 6 months of reporting history; preferably twelve.

This is for scoring purposes, obviously. If you can bank your advance at a higher rate than whatever the advance costs you, you can let it generate interest before PIF'ing the loan. But in this day and age, with rates where they are, I doubt that would do you much good.

If you can get an interest-free loan from Cap One (or anyone else), you'd be crazy to do it a different way.

[Anonymous]

I paid off my car loan early a few months ago and it didn't seem to help at all... I did have other loans though.

I'm interested to hear what others have to say.

[Anonymous]

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@haulingthescoreup wrote:

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@Anonymous wrote:

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@Anonymous wrote:
Sounds like it will only hurt your history. 1-2 months of payment history doesn't seem like it will help in the long run. And won't there be interest on top of the Cap One loan?

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Well it will be a $30k loan taken and paid in full.  Even if I take the interst-bearing loan it will only be two months of interest, however Cap1 has interest free loans if you qualify and pay in under 18 months.

I'd think it would show up as large loan approved, pre-paid early.

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No brownie points for pre-paying loans.

You want to have at least 6 months of reporting history; preferably twelve.

This is for scoring purposes, obviously. If you can bank your advance at a higher rate than whatever the advance costs you, you can let it generate interest before PIF'ing the loan. But in this day and age, with rates where they are, I doubt that would do you much good.

If you can get an interest-free loan from Cap One (or anyone else), you'd be crazy to do it a different way.

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Well I can get interest free from work as well.  I didn't want to go the Cap1 route as I figured a new $30 installment loan would hurt score or manual review for any new credit card credit I go for, especially as I will be going for some personal-guarantee biz loans and I don't want to jeopordize that. I thought I could make use of the corp advance to add a paid loan to my history and gain something from it. Sounds like no

[haulingthescoreup]

Well, of course you could do that.

Only you can decide whether the points gain (not huge, but it's there) from adding a loan if you don't currently have one beats the points ding from the inq and new account, plus as you say the risk of stirring up other lenders.

Frankly, I wouldn't take out a loan simply to please the FICO gods. They're too fickle as it is.

[Anonymous]

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@haulingthescoreup wrote:
Well, of course you could do that.

Only you can decide whether the points gain (not huge, but it's there) from adding a loan if you don't currently have one beats the points ding from the inq and new account, plus as you say the risk of stirring up other lenders.

Frankly, I wouldn't take out a loan simply to please the FICO gods. They're too fickle as it is.

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Now that's as good advice as I've heard. I'll do the loan through work and keep it under the radar.