Taking out a loan to improve credit score

[Anonymous]

Hi everyone,

This is my first time posting here. So I am 20 years old with a credit score ranging from 740-760 based on myFico, however, the "negative impact" all of the credit bureaus are giving me is the fact that I have no loans, and they suggest that I take out a loan to show that I can manage various types of credit.

Luckily, I am fortunate enough to not need loans due to family support/trust accounts, but to improve my credit score do you think it would be smart to take out a small loan (about $2,000) from The Lending Club, eventhough I don't need to purchase anything that I can't afford, and probably won't ever?

The only other negative would be AAoA, which surely will go up on its own.

[Anonymous]

There is no reason to do so at this point. Your scores are fine the way they are.

[Pway]

I agree, no need to get an loan.  Your scores are fine.

[ddemari]

I agree with the other posters, you do not need to take out a loan from lending club or other sites. Your credit mix is a small part of your fico score,although it is small it is important but you are doing well with your scores. No need to burden yourself with a personal loan. Keep doing a good job and with time you will see your scores get even higher. 

[Anonymous]

I pretty muich agree with the previous posts but......if you reaaallly wanted to bump the score a little bit remember the number of accounts includes ones opened, and closed. You could easily just take out a loan, wait for it to report one time, and then just pay it off. You would pay a month of interest every time but if it was a tiny loan would be hardly anything. Or of course you could always  just get a few more credit cards, I mean you could get approved for alomst anything with a 750.

[Anonymous]

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@Anonymous wrote:

I pretty muich agree with the previous posts but......if you reaaallly wanted to bump the score a little bit remember the number of accounts includes ones opened, and closed. You could easily just take out a loan, wait for it to report one time, and then just pay it off. You would pay a month of interest every time but if it was a tiny loan would be hardly anything. Or of course you could always  just get a few more credit cards, I mean you could get approved for alomst anything with a 750.

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That would drop their score.

[RonM21]

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@Anonymous wrote:

There is no reason to do so at this point. Your scores are fine the way they are.

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+1

Welcome to the board. Captool is absolutely right here. There is no need for you to do this right now, and so early in your credit life.  You are good where you are. Very good!

[Anonymous]

I agree with everyone else that said no need for a loan right now.

The IMPORTANT thing is that with your current scores, you will have no problem getting a loan when you actually NEED it which is what this game is all about

When the day comes that you do need a loan, assuming you're responsible with your credit in the meantime, you'll see your credit scores rise as you pay it down with it peaking likely in the last year of you making payments.

[takeshi74]

You need to be very careful with interpreting the reasons.  The reason you're citing isn't a major impact.  You're already at 740-760 and if that's with a FICO 8 then you're already in the range where best terms are generally offered.  The reason cited is indicating what's keeping you from getting to 850 but anything above the range you're currently in is just gravy.

Don't put the cart before the horse and let score drive your decisions.  Certainly keep score and impact to score in mind but make decisions that work for your overall financial health.

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@Anonymous wrote:

The only other negative would be AAoA, which surely will go up on its own.

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Taking out a loan will drop your AAoA as you will be opening a new account.

[Andy77]

Would a personal loan help me in my case (keep in mind, I am already being dinged for AoAA since I opened an account last year)

Here is why I wanna do the personal loan (most likely with Penfed as a CC debt consolidation)

I have 15 cards with zero balances (75k avail total)

One card with 22k bal with 23k CL

Was thinking of moving the 22k to personal loan so my cc utilization is not affected.

Thoughts ?