Secured loans wash and repeat

[Caitt]

Hello. I was told to get a secured loan of 200 and pay it within the month and wash and repeat. Does this affect your aoaa? Will this help my credit?

[Hockeypnc1]

Where would you get a loan that low?

And you mean pay off the entire thing right away?

[Caitt]

I have CDs I can borrow against. But with a secured loan they do not do inquiries due to it being your money you are borrowing. I do mines thru my credit union. Yes get 1 and pay it off within 21 days and then get another and pay it off the same way.

[Remedios]

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@Caitt wrote:
Hello. I was told to get a secured loan of 200 and pay it within the month and wash and repeat. Does this affect your aoaa? Will this help my credit?

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If each loan is reported as a separate one, it can annihilate your AAoA rather quickly unless you have 30+ accounts that are several decades old. 

The point of secured loan is to get one with a lender that would allow you to immediately pay it below 9% and push next payment well into the future, so you can get benefits of a low utilization loan without doing exactly what you described above