To open a SSL or not

[yourRealName]

My BK7 is almost 3 years old.

I just accepted a new card, so currently i have

1 LOC,  1k CL

3 cc’s, 16k total CL,

AAoA is 2.5 years (30 months)

3 hard pulls from over a year ago

1 HP today for the new card

If I now open a SSL, my bank will not do a hard pull, but my 30 month AAoA will drop to 2 years exactly. Is adding an installment loan to my credit mix worth dinging my AAoA even further? I just read that having the “3 revolvers 1 builder loan” optimal mix is less effective when you have a bankruptcy.

(I understand that AAoA rounds down, so the 30 months I currently have and the 24 months I will have if I open a new account are both treated as 2 years. My concern is how long it will take to bounce back from lowering the AAoA, not the initial hit to my score.)

[pizzadude]

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@yourRealName wrote:

My BK7 is almost 3 years old.

I just accepted a new card, so currently i have

1 LOC,  1k CL

3 cc’s, 16k total CL,

AAoA is 2.5 years (30 months)

3 hard pulls from over a year ago

1 HP today for the new card

If I now open a SSL, my bank will not do a hard pull, but my 30 month AAoA will drop to 2 years exactly. Is adding an installment loan to my credit mix worth dinging my AAoA even further? I just read that having the “3 revolvers 1 builder loan” optimal mix is less effective when you have a bankruptcy.

(I understand that AAoA rounds down, so the 30 months I currently have and the 24 months I will have if I open a new account are both treated as 2 years. My concern is how long it will take to bounce back from lowering the AAoA, not the initial hit to my score.)

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Your one year old LOC, is it reporting as a revolving account ?  Or installment ?

Can't really predict what the score hit would be for lowered AAoA, but it is possible that it might be offset from improved credit mix. 

[yourRealName]

The LOC is reported as revolving, not installment. 

[Horseshoez]

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@yourRealName wrote:

The LOC is reported as revolving, not installment. 

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Then an SSL can help your scores, however, keep in mind not all SSLs are created equal.  As I understand it, there are at least two types of SSLs:

1. The type which act like any other normal loan; if you take a 36 or 60 month loan out, pay it down to say 7% of the original value, you still need to make your regular payments which in turn means you'll only get the score bump for a few months before the entire loan is paid off and closed.
2. The type offered by NFCU, PenFed, and possibly a few others; the difference is these SSLs allow you to pay them down to that same 7% which causes the next due date to be pushed out several years (near the end of the original term).  This in turn allows your scores to get the bump for virtually the entire term.

Maybe your bank offers Type 2 above, but if they do, they'd be the first I've heard offering such an SSL.  Long story short, the point hit from another HP will pale in comparison to the benefit of having an SSL for multiple years into the future.

[yourRealName]

This is really helpful, thank you. I'll ask my CU if they offer type 2, and try penfed if not.