@NoHardLimits wrote:
@JoeRockhead wrote:If your current auto loan is your only open loan, you could lose up to 20 - 30 points (on average) on your Fico 8 (and some other models) scores for "no open installment loan" once it's paid off.
However, you don't have to have an open loan to achieve 800++ scores. Many people around here use the saying "finances over Fico".
Over time, your scores will recover the losses without an open loan on your reports. Once scores go above 760, you're in a tier to get all the best rates and offers where credit cards and most other consumer credit products are concerned. For certain mortgage products the magic number is 780 but that's another discussion.
You could do the SSL loan trick to boost your scores, (some auto loans will also function the same way) which is completely fine, but then you can find yourself playing that game over, and over again.
This is just just my opinion but, why essentially pay for those scores with a loan you don't need when they'll get back up there again all on their own. You could likely put that money to better use elsewhere, like in a HYSA.
I have a very aged and thick profile. A few days ago, my newest revolving account turned 1 year old and my FICO scorecard was presumably reassigned to a "no new revolver" segment. My EX8 score went up to 850. No open loans at all, though I have two closed mortgages which haven't dropped off my reports yet.
Very nice 
@DoppelgangerD wrote:
@FicoMike0 wrote:I just did the ssl trick, so I'll give my dp. I started in upper 700s with no installment loan on my crs. I took out an ssl with penfed and in about two months saw 30 - 40 point boost across all three cras.
I chose penfed because they were simpler to join than nfcu. It turns out they are less expensive as well. I've read that nfcu sometimes requires more than $3000 for a 60 month loan. Penfed is $25 x term in months, $1500 for 60 months. I think they will go up to 120 months. They charge 2.05%. The deal is, you deposit the loan amount, then borrow it back, then prepay it to 9% remaning. The unique feature with penfed and nfcu is they apply the prepay to payments due and don't shorten the term. I now owe them ~$150, with no payment due till 2028. The interest adds up to less than $10. No hard pull, either. Meanwhile, I have an open loan paid to 9% for five years.
Since you'll have a closed loan anyway you might get a lesser boost.
If you're interested, post your intent and I'll try to respond with a step by step.
You have explained this exceptionally well, even better than I could find elsewhere, and I appreciate it.
I too feel as of right now that Pended is the way to go if I did it today.
Even if I wait until end of summer to buy a vehicle, I doubt that the interest rate will be attractive enough to even consider an auto loan.
I think the best thing about this type of loan, is it's like having a traditional loan stuck in that euphoric phase of more than 90% paid off that really helps your scores, but instead of only lasting several months like an auto loan, it lasts years.
Like a super long lasting power-up in the video game of credit, lol.
I do wonder, just out of sheer curiosity, if doing more than one SSL would have an even better affect on credit profiles (?).
I personally wouldn't try that until they could be layered more effectively, like not until the first one is at least 50% completed before doing the second.
To make it easier to experiment with though, one could open up the 2nd one just about 5 or 6 months before the first one is paid off, and then you'd know, but would only have money from both tied up for a very short time. 😉
Doing more than one would do nothing positive for you.
@SouthJamaica wrote:
@NoHardLimits wrote:
@JoeRockhead wrote:If your current auto loan is your only open loan, you could lose up to 20 - 30 points (on average) on your Fico 8 (and some other models) scores for "no open installment loan" once it's paid off.
However, you don't have to have an open loan to achieve 800++ scores. Many people around here use the saying "finances over Fico".
Over time, your scores will recover the losses without an open loan on your reports. Once scores go above 760, you're in a tier to get all the best rates and offers where credit cards and most other consumer credit products are concerned. For certain mortgage products the magic number is 780 but that's another discussion.
You could do the SSL loan trick to boost your scores, (some auto loans will also function the same way) which is completely fine, but then you can find yourself playing that game over, and over again.
This is just just my opinion but, why essentially pay for those scores with a loan you don't need when they'll get back up there again all on their own. You could likely put that money to better use elsewhere, like in a HYSA.
I have a very aged and thick profile. A few days ago, my newest revolving account turned 1 year old and my FICO scorecard was presumably reassigned to a "no new revolver" segment. My EX8 score went up to 850. No open loans at all, though I have two closed mortgages which haven't dropped off my reports yet.
Very nice
Thank you!
@DoppelgangerD, in answer to your question about setting up your SSL online, neither NFCU or PenFed have their web sites set up to handle that; you'll need to contact Customer Service.
When I did my SSL back in 2021, like you I opted for PenFed and for the same reasons as you; here's how it went down:
- I moved enough money from my Premium Savings to my Regular savings to bring that balance to at least $3,005
- I contacted customer service 30 days later and set up the SSL for $3,000 for five years
- I was given the option of receiving a check for the "loan" or having the money deposited back into my Premium Savings account; I chose the latter.
- Instead of paying the loan down to under 9% right away, I decided to pay it down in a stair-step fashion to see how my FICO scores reacted to each of the reported LTB thresholds (no surprise, each threshold bumped my scores)
- Once the loan got to about $250 I left it alone until I bought my new vehicle in late 2022, at which point the SSL was redundant and I paid the remaining balance.
