I have relatively strong credit score (high 700's), utilization near zero and all is good.
But, I don't have any installment loans.
One of my revolving account banks (PenFed) recently sent me a pre-approval on a personal loan up to 25K. No gimimck, spend anyway I want etc. I can set the durtion to up to 60 months. Terms are NOT good (9.9%)
I have no need for a loan (actually I do have some upcoming expenses that I could put 10K to use for a month or two, but I certainly don't need it and no pain in my life without the loan.)
Finally to my question,
Should I take this offer, put the cash in my bank account. Within a couple months pay back a HUGE percentage of the loan and then pay the tiny balance off over an extended time -->with the goal of having an almost paid-off installment loan on my credit file for an extended time?
Here are my naive thoughts
--No credit check, I'm pre approved. ..so no HP ding.
--New account will affect my score(?) (or will it? it's not a revolving account)
--Interest, I'll be paying a couple bucks in interest, but nothing significant cuz I'll immediatly pay off the vast majority of the loan even at 9.9% the tiny balance will create miniscule interest.
My gut tells me it's not worth messing with ...but am I missing an opportunity by not taking this offer and using it to have a solid installment loan on my credit file.
Any wisdom, (especially good wisdom LOL) appreciated.
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I see you're a member of Navy. They have the SSL 2.25% apr for 5 years. Prepayment does push out the due date. No hard pull but new account will reset your AoYA.
Getting back to PenFed. Data points show Prepayment also pushes out the due date. Loan check is not a true SSL but reacts very similar. Same pros as Navy only negative is higher apr. Maybe $25k is nice to have as extra padding.
In summary, if no access to Navy, PenFed would be a great 2nd alternative.
You can expect FICO score boost +-30 points, depending on profile.
There's also a TX CU that does 10 year SSL.
ETA depending on SSL amount, I've paid 11 months of interest at $8 total so far for +- 30 FICO points.
Getting back to PenFed. Data points show Prepayment also pushes out the due date. Loan check is not a true SSL but reacts very similar. Same pros as Navy only negative is higher apr. Maybe $25k is nice to have as extra padding.
In summary, if no access to Navy, PenFed would be a great 2nd alternative.
You can expect FICO score boost +-30 points, depending on profile.
There's also a TX CU that does 10 year SSL.
ETA depending on SSL amount, I've paid 11 months of interest at $8 total so far for +- 30 FICO points.
If your scores are in the high 700s, why do you need to optimize them? Are you planning to apply for something big? Anything over 750 already gets you the best rates. Once you start getting close to 800, it seems you take a bigger hit from cutting your AAoA than any boost you would get, at least that's what I've noticed.
^ in the words of Brian_Earl_Spilner, because its Gucci?
