Here is a thread that explains all about it. You only need to read the first two posts.
The lender we recommend (Alliant) stopped offering SS loans about a week ago, but there are definitely other lenders that would make a good fit for this technique. We just need to locate them and confirm that they work. We'll probably have a few by March.
I read on some forum (not here) that there was a method by which one took out a personal, secured or unsecured loan at a bank or Credit Union, made a few payments, then paid off the loan.
The incorrect part above is "then paid off the loan" [after making a few payments]. Once you pay off a loan, the positive scoring boost you gain from having an open installment loan on your credit report goes away. If you're talking a substantially paid off loan, you're looking at around 30 points. CGID's link above will give you all the detail you'll ever want to know, but the important thing to remember is that you want to open one of these loans and substantially pay it down (but not off) immediately, then go a period of years keeping the loan open with a very small balance of < 8.9% of the original amount.