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Starting to get the hang of it, but what next?!

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New Visitor

Starting to get the hang of it, but what next?!

Hows it going guys. About 10 months ago my score was 520. I am currently at 660 with 2 revolving accounts at about 50% utilization and going down. i understand having total utilization at under 10% would be optimal so im working towards that. my real question is should I request a small loan for about 1500 dollars to add diversity to my file and at the same time use it to drop my utlization down to where it should be? And also would taking out a loan in my situation drop my score before raising it? Thanks for any help!!!!

Message 1 of 9
8 REPLIES 8
Super Contributor

Re: Starting to get the hang of it, but what next?!

It will be difficult to get a loan with 50% util on 2 cards and your scores. Yes a loan will help with the credit mix. But it would have to be a secured loan like self lender. You'll want to check credit unions and see who had rebuilder loans. But it will come back as a secured loan. Focus on getting your util down to less than 8.99% on 1 card and 0 on the other. You'll see a score rise after thats completed. Without knowing what led to your low end scores. And what baddies are present on your reports. A regular personal loan may be out of reach at the moment. Rebulding is all about proving yourself. If you cant pay it at the end of the month. Dont charge it. Welcome to the forums.





My posts are JMHO. My siggy is not to brag at all. Just sharing my experiences after learning here from rebuild to recovery after BK DC @ 540's. And to show fellow members what can be accomplished when you do it right and play the FICO Credit Game.
Message 2 of 9
Established Contributor

Re: Starting to get the hang of it, but what next?!

I agree a lot with what FireMedic has to say.       Some loans will but depending on your state I wouldn't know who to 'offer' as someone in my state might not be available in your state and also depending on certain information like for example I do have someone I could recommend if they are in your state idk but you would need to have no late payments and decent income etc the utilization isn't as big a deal for them but they will do HPs so that and adding an account will hurt you for a little bit but if you use it to drop your utilization to where it shows the one loan that may build it back if used properly and after a few months of it reporting, then once it is closed (paid off)  it will drop slightly but pop back up as it will be affecting your Age as well Smiley Happy     
















Message 3 of 9
Established Member

Re: Starting to get the hang of it, but what next?!

+1 to local credit unions.  It's not impossible to get a loan with your stats, but you definitely want to try a place that would be more forgiving/understanding and get you where you need to be.  I think a debt consolidation loan with a local credit union would definitely help add to your credit mix and increase your scores through lowering your utilization.

 

A caveat, though: if you have a decent enough income, it would probably be better to just pay the balances down yourself and garden for a little bit as you pay them down or also maybe go the Self Lender route as others have done on these forums.  Once you have better utilization, I would look at adding a third revolver to help improve your scores and also help with utilization if you get a decent-sized limit.

 

If Navy Federal is an option, I'd be on them like Jasmine on rice if I were you.

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Message 4 of 9
Frequent Contributor

Re: Starting to get the hang of it, but what next?!

Have you thought about maybe trying to get a secured loan? That may help and it is easier to get approval when you are providing the funds. 


Starting Score: TU-470 4/11/19, EQ-482 4/11/19, EX-486 4/11/19
Current Score: TU-507 7/18/19, EQ-517 7/18/19, EX-508 7/18/19
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Message 5 of 9
Senior Contributor

Re: Starting to get the hang of it, but what next?!

How long of a loan where you considering?

What is the main objective, lower revolving account utilization or credit mix diversity?
Message 6 of 9
New Visitor

Re: Starting to get the hang of it, but what next?!

not very long, maybe just 18-24 months. Honestly im just trying to get in the best place i can to get my score to mt goal of 750. i dont NEED the loan since i can handle paying down the utilization on my own no problem, but i figured if the diversity of having a loan as well as revolving accounts would help, then why not do that and use it to pay off my 2 cards. 

Message 7 of 9
New Visitor

Re: Starting to get the hang of it, but what next?!

yeah i can definitely handle paying down the balances my self. just wasnt sure if it would be a smarter option to try and kill 2 birds with 1 stone by getting more diversity while dropping my utilization down to under 10 percent

Message 8 of 9
Senior Contributor

Re: Starting to get the hang of it, but what next?!

Best to pay down the revolving debt without the loan.

18-24 month loan will come and go before you know it. For a typical installment loan, you might be penalized points for high utilization. You'll realize the score boost when installment loan <8.9% utilization. Estimated point gain 20-30. By that time, the loan will be almost paid off, you're nearing the end if the term. Then, finally paid and closed. Thus, loosing the points you gained. It's short lived.

For FICO credit mix / scoring purposes, I would only recommend a 5 year shared secured loan that pushes out the due date with prepayment. Do you have military affiliation or reside in Texas?

Message 9 of 9
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