I currently have 7 credit cards, 1% utilization, 1 inquiry, 4 derogatories (that will fall off in late 2019) & 1 loan from Affirm that only reports to Experian (it was 12 months & will be paid off in Dec 2018). Two closed mortgage accounts will fall off of my credit report in Spring 2020. As you can see by my profile name, I want to buy a home in Spring 2020. So between now & then I need to diversify my account types in a way that will be most attractive to mortgage lenders.
I need a new car, but I'm self-employed & have had very unsteady income over the past couple years as I've cared for my mom with Alzheimers. So I don't think I will look attractive to auto lenders. But I do have cash to buy a car. And I have a $50K CD. So I'm seeking advice on a strategy to use either a paid-in-full car or the CD to get a secured loan & pay the least interest possible yet benefit from having a paid-as-agreed loan on my report at all 3 credit bureaus.
I've gathered puzzle pieces of how to do this from reading various posts & articles. But I don't have enough pieces to form the best strategy for me. I don't currently belong to a credit union, and I don't fall into any of the most common eligible groups. But I saw some sites today that gave me the impression that credit unions have found a way to partner with cause-related non-profits that you'd join for $10-$15 in order to qualify for their credit union (a loophole to expand their market I'm sure). But in general, I'm ignorant when it comes to loans, since I was salaried, then married, then single but caregiving & not making a steady income. I haven't been a lender's dream, so I've stuck with revolving credit up until now.
Another option is financing a $2,000-$2,500 laptop, but I'm not sure how financing a purchase like that (say through Dell) is reported or how to find out. That's the only thing I would use loan money for anyway.
Then another thing I read about today was getting a secured CD through your bank where you pay into the account every month for X months (at least 12) then get it back at the end.
As you can see, I have just enough knowledge to be dangerous & not enough to create a smart strategy. Any thoughts?
Yeah I didnt make that very clear because I don’t have the dates in front of me. I think they fall off my report in April 2020 & my current lease runs through 6/30/2020 (unless owner moves back to U.S. and wants his home back). So I’m thinking that by the time I’m seeking a mortgage, I will have my single sad 12-month $1,000 Affirm loan thats only on Experian.
Okay, first, well-written, easy-to-understand response so thank you for that. And for the "hope factor" ... that's always a good foundation to lay down.
On the military front, I have no *living* relatives in the military. But my grandfather served in WWII, two uncles in Vietnam & Korea & my father was in the Air Force for 4 years right out of high school. My mom was one of 13 kids, so I actually never even met these uncles & because my dad's service was before I was born, I don't even think of having any family in the military. Do any of these count?
Sadly, I don't even yet know what falls under the category of "financing loan" of the things I mentioned. Just the financing of the laptop (which I would only be doing for the benefit of the loan reporting not for cashflow reasons)? Or do the CD or car title loans also fall into this camp?
On a separate, but perhaps related question, when researching I ran across another post that said lenders don't look fondly on Consumer Finance Accounts. They listed some CFLs like One Main Financial, Wells Fargo Financial, Citi Financial. But a question that wasn't answered is ... how would you even know that a lender you're looking at is a CFL. I know that's not the path we're walking down here, but it is a misstep I'd like to know to avoid any boo-boos on future decisions. Nothing worse than working hard to make a positive step & having it have negative implications.
I also read a long post a several months ago about Share Secured Personal Loans I think through Alliant (might be remembering that name wrong). But it seemed that they were considered on this forum to be the go-to option for SSLs, but they stopped offering them somewhere around 12/29/2017 & no one had identified an equally good replacement as of my reading the pinned update at the top of the post.
As I understood it at the time, the key factors were no penalty for paying it down early, low interest, maybe low minimum $$ amount, 12+ month term & didn't need any special qualifiers to join? Am I missing key factors you'd look for in the ideal scenario?
I am not so sure that Alliant's SSL does not report at a CFA I have no store cards and only one installment loan a SSL from Alliant. The following screenshot shows a CFA is affecting my score on Experian. I have seen the same alert on other sites as well.
How ever I am sure the points gained far out weigh the points lost.