topic Re: New to loans (boosting credit) in General Credit Topics

New to loans (boosting credit)

Anonymous — Mon, 04 May 2015 17:51:07 GMT

Welp, I am in college, starting my credit path. I now have PNC secured card, Discover it, Chase AARP, and Sallie Mae Mastercard. But I still have never taken a loan out. Where should I start?

I've been told to take out a personal loan from my bank (Huntington), but I am just not sure. So I am here asking you guys! For boosting my credit score/history through loans, should I take out a personal loan? Where should I take it out through? (my bank at Huntington, or somewhere else?) Does it matter how much I take out? etc.

Thanks guys.

Re: New to loans (boosting credit)

Scupra — Mon, 04 May 2015 20:16:41 GMT

It doesn't matter where you take it out as long as they report to all three CRA's. You should be fine with a 12 month $1k loan

Re: New to loans (boosting credit)

Anonymous — Tue, 05 May 2015 00:20:38 GMT

Great. Glad to hear it's nothing too crazy complicated! Thank you!

Re: New to loans (boosting credit)

Anonymous — Tue, 05 May 2015 01:02:00 GMT

you should be fine to do it at your bank, as stated, and even if you aren't approved, you can always do a $6001$1,000 secured loan for 6-12 months. the benefit in that is if you do that, you can put the initial money in a CD, do a CD secured loan for a low low interest rate, then the money they give you as a loan you can put in your savings, then after you pay your monthly payments out of your regular money that you make every month, you have doubled your money

Re: New to loans (boosting credit)

takeshi74 — Tue, 05 May 2015 12:58:43 GMT

@Anonymous wrote:
But I still have never taken a loan out.

Don't unless you actually need one. Don't take one just for scoring purposes.

Re: New to loans (boosting credit)

Anonymous — Tue, 05 May 2015 17:57:57 GMT

Isn't having on my credit report that I've taken a loan, and paid it off as agreed, a good thing though? When I go to get a car or motorcycle loan for instance, won't they say my credit is pretty limited due to me not having any loans?

The main reason I am wanting to do such a thing, is because I want to be able to get the best loan possible for a new car within the next 1-2 years... as well as I will be looking to buy myself a home in about 2-3 years.

So should I look into getting a personal loan before buying my first new car and home? or should I just dive into getting a new car loan, and then a mortgage later and I'll be fine? I just want to get the lowest APRs/interest possible is all.

Re: New to loans (boosting credit)

Anonymous — Tue, 05 May 2015 18:32:03 GMT

@2011XTERROR I am a little confused on what you are saying I could do.

1) Take out a $600 - $1000 secured loan for 6-12 months

2) Put that money from my secured loan into a CD secured loan

3) Then that money they give me from the CD secured loan, I put into my saving and dont touch it

4) Then pay off my $600-$1000 secured loan, and my CD secured loan monthly payments

5) Then I have that loan money in my saving, and I get the CD money back.

Is that correct? As long as I followed you correctly, and as well as I am understanding how a CD works as well lol.

Re: New to loans (boosting credit)

Scupra — Tue, 05 May 2015 18:39:01 GMT

$1k loan for 12 months shouldn't cost that much, I would do it if it were me. Obviously the choice is yours to make in the end

Re: New to loans (boosting credit)

Anonymous — Tue, 05 May 2015 19:18:59 GMT

@ optimiztix - kinda-ish lol

let me just give one figure and it may be easier to explain/understand
if you don't get approved for a loan you can try this to build credit:

take $1,000 of your own money and put it in a 12 month CD (or whatever amount you want but the minimum is usually $500)
once it's in a CD, use that as collateral for a CD-secured loan with your bank or credit union
(so at this point you have your own money gaining interest in the CD and you have the loan cash they just gave you of $1,000)
take the $1,000 they just now gave you and put that in savings or CD

every month you still have you loan payment, so pay that like you would a bill with your income from work. by the time it's paid off you have two $1,000 CDs ready to mature and you have $2k vs your original $1k

Re: New to loans (boosting credit)

Anonymous — Tue, 05 May 2015 19:23:07 GMT

and btw with a credit union a CD secured loan interest rate is usually only 2% above the CD rate. so if the cd rate is .6% then the loan rate is 2.6%. that's about as cheap as you can get when it comes to cash loans.

Re: New to loans (boosting credit)

Anonymous — Tue, 05 May 2015 19:29:47 GMT

@Scupra, thank you! Appreciate your opinion/info.

Re: New to loans (boosting credit)

Anonymous — Tue, 05 May 2015 19:30:17 GMT

@2011XTERROR Got it now. That cleared it up. Thank you so much for the suggestion, and info. I will look into it

Re: New to loans (boosting credit)

jamie123 — Wed, 06 May 2015 03:03:27 GMT

You should investigate getting a 4 year $500 shared secured loan from Alliant Federal Credit Union.

This is how you do it:

1. Open a savings account and fund it with $550. Alliant is one of the few lending institutions that will allow you to open a savings account without a hard pull.

2. After about 10 days when the account is funded and active, apply for a 4 year $500 shared secured loan. They lock $500 in your savings account but the loan has a GUARANTEED approval WITHOUT a hard pull. They give you your $500 back in the form of a loan so you are really only out $50 to have a 4 year loan on your reports.

3. Setup autopayments from the savings account to pay the loan off. You never have to worry about making a payment! You funded the account with an extra $50 to pay the interest on the loan. When the loan is paid off 4 years from now you will have about $23 in the savings account.

You also become a member of Alliant Federal Credit Union and now have a place to go for low interest rate auto loans when you need them!

It is a really cheap way to get a loan. You are only tying up your $500 for the few weeks it takes to open the account until you get the $500 back and you are doing it all without hard pulls.

Re: New to loans (boosting credit)

Anonymous — Wed, 06 May 2015 12:33:32 GMT

@jamie123 that sounds like a great idea. Thank you for laying that whole process out for me. Much appreciated!

EDIT: Now that I think about it. I am a student, and I have taken out a handful of government loans through the FAFSA. Every year of my 4 year journey through college I have to take out government loans. But I won't start paying them off until after I graduate. Would I still benefit from doing this $500 secured loan?

Re: New to loans (boosting credit)

jamie123 — Thu, 07 May 2015 02:33:03 GMT

Yes, you would still benefit from the $500 installment loan because that would appear as an active loan on your reports. The student loans are in deferred status so are not helping your score at the moment.

Re: New to loans (boosting credit)

Anonymous — Sun, 10 May 2015 21:28:35 GMT

Okay, great! Thanks for all your help jamie123