topic Re: taking out a credit builder loan in Understanding FICO® Scoring

taking out a credit builder loan

folks19 — Tue, 09 Jun 2020 01:23:20 GMT

After having my first and only credit card for about 8 months, and my experian fico score was about 708 points, i decided to take out a creidt builder loan to have a better credit mix. After getting the the loan (about a month and a half ago) my score dropped to 669. Was taking out that loan a good moov? How much can i expect my score to go back up in the next 6 months?

Re: taking out a credit builder loan

Anonymous — Tue, 09 Jun 2020 01:34:27 GMT

@folks19 wrote:
After having my first and only credit card for about 8 months, and my experian fico score was about 708 points, i decided to take out a creidt builder loan to have a better credit mix. After getting the the loan (about a month and a half ago) my score dropped to 669. Was taking out that loan a good moov? How much can i expect my score to go back up in the next 6 months?

Yes it takes a little while to get the scores up, as you build history. Also note that as you pay down the loan, your scores will increase. Are you using credit karma or myFico to get your scores; Ck uses vantage scoring and MyFICO uses Fico scoring. If you have a car loan or student loan, those are also installment loans, and you only need one.

Also you might look into the AZEO method of Fico score optimization. It's all over this forum so search it. The formula:

3 credit cards +1 installment loan = best Fico score

is tried and true. You pay down each card to zero before their statements cut EXCEPT for one which you le report a small balance then pay it in full (PIF) by the due date. All Zero Except One = AZEO

good luck!!

Re: taking out a credit builder loan

folks19 — Tue, 09 Jun 2020 01:43:29 GMT

i'm using the experian score directly from experian's app. it's free, and it's a fico score not the vantage. i also use credit karma but for reference only!

Re: taking out a credit builder loan

Anonymous — Tue, 09 Jun 2020 02:01:11 GMT

@folks19 wrote:
i'm using the experian score directly from experian's app. it's free, and it's a fico score not the vantage. i also use credit karma but for reference only!

Depending on your situation, you might consider getting 2 more CCs to up your scores. But do your research first. Good luck!!