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self lender alternatives

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Stugotsv10
Frequent Contributor

self lender alternatives

I like self lender, I have a few family members with them, any other companies like them? or are they the ONLY type like that? 

Message 1 of 25
24 REPLIES 24
Medic981
Valued Contributor

Re: self lender alternatives


@Stugotsv10 wrote:

I like self lender, I have a few family members with them, any other companies like them? or are they the ONLY type like that? 


 

Self Lender is the only company that I know of that you can obtain a secured installment loan without the money upfront.

 

A share secured loan from a credit union or credit builder loan from a bank are the closest runner-ups that I am aware of.







Your FICO credit scores are not just numbers, it’s a skill.
Message 2 of 25
Stugotsv10
Frequent Contributor

Re: self lender alternatives

guess on that note my other question would be...

 

Does the amount of "Closed / paid off" loans on your report help? for example if one were to pay off a self lender account an open another one (I would imagine they would not care they make the $30 every time lol)  so it would show 1 closed / perfect payment history and one open with perfect payment history.

 

Fico does in fact factor closed accounts in right? and with no credit check / inquiry this could in theory work right? 

Message 3 of 25
Anonymous
Not applicable

Re: self lender alternatives


@Stugotsv10 wrote:

guess on that note my other question would be...

 

Does the amount of "Closed / paid off" loans on your report help? for example if one were to pay off a self lender account an open another one (I would imagine they would not care they make the $30 every time lol)  so it would show 1 closed / perfect payment history and one open with perfect payment history.

 

Fico does in fact factor closed accounts in right? and with no credit check / inquiry this could in theory work right? 


You are allowed to open a second Self-Lender account without a credit check. Fico factors both open and closed accounts in your AAoA. Smiley Wink

Message 4 of 25
Medic981
Valued Contributor

Re: self lender alternatives


@Anonymous wrote:

@Stugotsv10 wrote:

guess on that note my other question would be...

 

Does the amount of "Closed / paid off" loans on your report help? for example if one were to pay off a self lender account an open another one (I would imagine they would not care they make the $30 every time lol)  so it would show 1 closed / perfect payment history and one open with perfect payment history.

 

Fico does in fact factor closed accounts in right? and with no credit check / inquiry this could in theory work right? 


You are allowed to open a second Self-Lender account without a credit check. Fico factors both open and closed accounts in your AAoA. Smiley Wink


Ultimately, what a person needs to improve their FICO scores and build credit are three open credit cards (secured or unsecured) in good standing and one open installment loan in good standing such as a car, home, student, personal, share secured, or credit building loan. This combination is what the myFICO score theorists here have determined is what you need for optimal credit building and FICO score. You can have more CCs and more installment loans, however, this will not increase your FICO scores.

Next, (this is only important if you are attempting to purchase a large ticket item like a home or car) is paying in full all of the credit card balances each month, before the posting date, except one. This is called the All Zero Except One (AZEO) method. The one credit card you allow to post a balance needs to be less than 8.9% of the credit limit of the card. So using one card each month to buy lunch, letting it report and then paying in full will maximize FICO scoring. Keeping your utilization of your cards below 28.9% both individually and collectively will prevent you from incurring a FICO scoring penalty.

An installment loan will have its greatest impact on your FICO score when the amount owed is at 8.9% or less of the original amount owed which is usually in the final months before the loan is paid in full. If you don't have an installment loan you can check into Self Lender or a Share Secured Loan at a Credit Union.

Keep in mind, building credit is a marathon, not a sprint. It involves demonstrating to a potential creditor that you can handle credit responsibly. If you have open, active credit accounts that are being paid on time and pay all of your bills on time every time, apply for credit only when you actually need it and use credit cards sparingly maintaining low credit utilization, then you’re going to earn and maintain great credit scores. It would be impossible for you not to do so. This is the fastest way you can build good, solid credit.







Your FICO credit scores are not just numbers, it’s a skill.
Message 5 of 25
Anonymous
Not applicable

Re: self lender alternatives

Im on my first self lender 12 months. After complete, should i do second self lender for 24 months. Or should i do the alliant unsecured loan for 60 months. My fico score is 694. Wanna get mortgage in 5 years. Please help me
Thanks
Message 6 of 25
Medic981
Valued Contributor

Re: self lender alternatives


@Anonymous wrote:
Im on my first self lender 12 months. After complete, should i do second self lender for 24 months. Or should i do the alliant unsecured loan for 60 months. My fico score is 694. Wanna get mortgage in 5 years. Please help me
Thanks

@Anonymous the only reason, I would recommend you get another Self Lender loan is to thicken your credit bureau files. Another reason to get a SL loan is to help build an emergency fund except for the fact that the money is not readily accessible until you pay off the loan.

 

Your signature shows your Current Scores as of 10/23/2018 Score 8 EQ 744 TU 751 EX 731. If you keep your FICOs in this range for the next 5 years you will have no problems getting a loan at a great interest rate as long as your DTI is in line with what you are wanting to buy.

 

Having an active installment loan on your bureau files gives you a slight FICO score boost for account type mix and another FICO score boost when your account balance is at 8.9% or less of the original loan. If you can arrange for your installment loan to be at 8.9% or less when you are applying for your home loan then you have a score advantage. However, you might see a significant drop in your FICO score when the installment loan is paid off due to loss of the account mix boost and bonus FICO bump for almost having your installment paid off.

 

@Anonymous for having an unsecured installment loan just for the sake of having an installment, I would not. @Anonymous has an extensive thread "Adding an installment loan -- the Share Secure technique" with details on about the topic.

 

Good Luck and Best Wishes!







Your FICO credit scores are not just numbers, it’s a skill.
Message 7 of 25
Stugotsv10
Frequent Contributor

Re: self lender alternatives

Anyone notice a score drop when self lender first hit the report? or do score drops / new credit only hurt when its not an installment? 

Message 8 of 25
Medic981
Valued Contributor

Re: self lender alternatives

I don't recall a scoring dip when I first got my Self Lender loans however I did notice drops by about 20 points when the loan was PIF and no longer an active installment loan.







Your FICO credit scores are not just numbers, it’s a skill.
Message 9 of 25
Anonymous
Not applicable

Re: self lender alternatives

Hello:

On my own credit rebuilding journey.

Check out credit unions for secured credit builder loans. I went with Self-Help Federal Credit Union. It was a secured $500 loan. Required a Hard Pull, opening a savings account. If you had direct deposit set up, no monthly fee.  Will keep you updated as to how it works out. Excellent terms, loan insurance. It worked for me.

Best,
P

Message 10 of 25
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