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One year later and I finally paid off my Self builder loan!

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frankjaeger
New Contributor

One year later and I finally paid off my Self builder loan!

...and it dropped my score by 13 points?! I thought this thing was supposed to HELP my credit?

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Horseshoez
Valued Contributor

Re: One year later and I finally paid off my Self builder loan!

It did, and then you paid if off; then it stopped helping you.

 

The game many of us play is to open an SSL for say, 36 to 60 months and then pay 91.1% of the balance shortly after the loan was originated.  For SSLs, this results in the next payment being pushed waaaay out into the future, this in turn gives you a nice credit bump for the duration.

I categorically refuse to do AZEO!
Message 2 of 4
frankjaeger
New Contributor

Re: One year later and I finally paid off my Self builder loan!


@Horseshoez wrote:

It did, and then you paid if off; then it stopped helping you.

 

The game many of us play is to open an SSL for say, 36 to 60 months and then pay 91.1% of the balance shortly after the loan was originated.  For SSLs, this results in the next payment being pushed waaaay out into the future, this in turn gives you a nice credit bump for the duration.


Considering that, looking through all my credit notifications on MyFICO, I never once got any points increase from this loan, I would say it didn't help at all.

Message 3 of 4
Horseshoez
Valued Contributor

Re: One year later and I finally paid off my Self builder loan!


@frankjaeger wrote:

@Horseshoez wrote:

It did, and then you paid if off; then it stopped helping you.

 

The game many of us play is to open an SSL for say, 36 to 60 months and then pay 91.1% of the balance shortly after the loan was originated.  For SSLs, this results in the next payment being pushed waaaay out into the future, this in turn gives you a nice credit bump for the duration.


Considering that, looking through all my credit notifications on MyFICO, I never once got any points increase from this loan, I would say it didn't help at all.


Hmmm, I just opened up an SSL with PenFed last month and it just popped up on all of my reports, I am definitely seeing a small bump even though I have opted to initially pay it down 16.6% at a time.  Said another way, I took out a $3,000 secured loan in early April and then a week later paid $500 against the loan yielding a $2,501 balance; this was enough for between 4 and 9 points for many of my scores.  Over the next four months I'm planning on tossing another $500 per month at it and then see what happens to my scores; once I get the balance down to about $500, I'm going to start making token payments with the goal of having it under 9% early next year when my wife and I are planning on looking for a new home.  Should be an interesting experiment.

 

Side comment, as I was typing the above comment, I remembered someone, somewhere here on this site saying something like, "The secured share loan trick works best on a clean score card."  If I'm remembering correctly, then those of us with "dirty" cards may not benefit terribly much from playing the SSL game.

I categorically refuse to do AZEO!
Message 4 of 4
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