What to do to keep scores high and credit files attractive to banks?

[DoppelgangerD]

@Horseshoez

Thank you the DPs and info.

Much appreciated!

[Thomas_Thumb]

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@Horseshoez wrote:

When I did my SSL back in 2021, like you I opted for PenFed; 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
• 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.

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@@Horseshoez 

Do you still have the data from stepping down the B/L ratio on the SSL? If so, can you post scores vs B/L along with comments if other factors might have influenced score.

Thanks.

[Horseshoez]

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@Thomas_Thumb wrote:

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@Horseshoez wrote:

@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.

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@@Horseshoez 

Do you still have the data from stepping down the B/L ratio on the SSL? If so, can you post scores vs B/L along with comments if other factors might have influenced score.

Thanks.

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I'll check, but I'm not optimistic I kept the data given it lined up exactly with the expected thresholds.

[SouthJamaica]

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@DoppelgangerD wrote:

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@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.

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So I decided to take SSL route and got the ball rolling by filling out a savings acct ap (which also doubles as a member application) with PenFed and that is now pending.

Hopefully I'll hear back from them on Monday.

So can the SSL all be done online?

Any pointers or guidance is much appreciated. Thanks!

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1. As @Horseshoez pointed out, you can't do an SSL online. You need to call in.

2. As @800wannabe420 pointed out, you need to let the funds sit there for a month before applying for the SSL.

[SouthJamaica]

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@Thomas_Thumb wrote:

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@Horseshoez wrote:

When I did my SSL back in 2021, like you I opted for PenFed; 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
• 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.

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@@Horseshoez 

Do you still have the data from stepping down the B/L ratio on the SSL? If so, can you post scores vs B/L along with comments if other factors might have influenced score.

Thanks.

---

I've done the SSL trick, and my recollection is that nothing whatsoever happened until I got down to 9%, when I got a big boost. After the first couple of times, I stopped even bothering with gradual payoffs.

[FicoMike0]

The only negative I saw from ssl was it's a new youngest account. No hard pull. My AoYA at the time was about 3 months, not a big deal for me.

[Thomas_Thumb]

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@SouthJamaica wrote:

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@Thomas_Thumb wrote:

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@Horseshoez wrote:

When I did my SSL back in 2021, like you I opted for PenFed; 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
• 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.

---

@@Horseshoez 

Do you still have the data from stepping down the B/L ratio on the SSL? If so, can you post scores vs B/L along with comments if other factors might have influenced score.

Thanks.

---

I've done the SSL trick, and my recollection is that nothing whatsoever happened until I got down to 9%, when I got a big boost. After the first couple of times, I stopped even bothering with gradual payoffs.

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As we know, profiles/scorecards react differently to various scoring attributes. Horseshoez reported seeing score changes at various thresholds along the way. That data could be insightful.

SJ, the data I recall seeing you post related to step down of an auto loan. There were one or two minor score boosts along the way before the big jump crossing below 10% or 9%. The minor boosts were reported on 2 of 3 CRAs. If so, perhaps there were update timing differences that didn't show on the 3rd CRA.

For those not needing an instant score boost, additional stepdown data on SSL B/L ratios is welcome. It needs to be the only open loan on file to isolate effect.

I'd be particularly interested in results of adding an SSL to relatively thin files with age of youngest revolving account over 12 months. Data points of interest for stepdown: 90%  and above => 60%-65% range => 40%-45% => 20%-25% range => 5%-9% range.

[Horseshoez]

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@Horseshoez wrote:

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@Thomas_Thumb wrote:

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@Horseshoez wrote:

@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.

---

@@Horseshoez 

Do you still have the data from stepping down the B/L ratio on the SSL? If so, can you post scores vs B/L along with comments if other factors might have influenced score.

Thanks.

---

I'll check, but I'm not optimistic I kept the data given it lined up exactly with the expected thresholds.

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I looked for the spreadsheet I kept at the time, unfortunately as suspected, I didn't keep on.  Sorry; had I known the data would be useful I would certainly have kept it.

[FicoMike0]

One point. Penfed does as little as $25 X loan term in months. $1500 for 5 years, $3000 will go 10 years.

[DoppelgangerD]

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@Horseshoez wrote:

@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.

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Ok, so I noticed they have 2 savings account options...

The standard savings and the premium, with the latter earning about 3% while the standard earns almost nothing.

Why not opt for a premium savings account so that your SSL earns money while it's being held as collateral? ...or does it not work that way? ...and if not, please enlighten me. Thanks 🙂