Adding an installment loan -- the Share Secure technique

[Anonymous]

New to fico forum and Just boarded this train shared secured loan. Thanks CGI for the detailed information. Completed steps 1 -3. Here is my first update

8/31 – opened Alliant Savings account and funded

9/6 - Received welcome packet

9/8 – Applied shared secured loan online for $500, 60 months

9/9 – Received email from Loan Consultant, not a phone call. Saying “loan app approved for $500 for 60 months at 4%.  Your payments come to $9.21 a month. If you want to continue, we will put $500 on hold in hour savings, lend you $500 and place that in your savings, and also take an auto pay from your savings every month starting on 10/01/16.  If all sounds good, we will send you loan docs via email/docusign today.  Please let me know if you want to continue”

9/9 – So I replied with continue, 2 hrs later received loan docs to sign online. Completed esign

9/9 - $500 loan amount deposited in savings account, Due date 10/1/16, Due amount - $9.21

So far its simple and done

Next Step:

PAY IT DOWN; planning to do it on 9/11 or 9/12

Question: Currently have credit karma scores. Do you suggest for me to sign up total credit check to check the scores now so I can compare later once the loan is reported to CRA’s? 

Any other suggestions/advice at this stage, please let me know. Thanks!!

[Anonymous]

Hello Kak!  Fascinating to hear that Alliant may be automating more of their process, specifically the piece that used to be taken up with a 1-on-1 conversation with a Loan Officer.  I wonder whether the last few months has resulted in such a sharp intake of applications for their SS loan that they are switching to a system that removes that piece.  It's good news regardless for folks here, since it should result in a more consistent message between LO and customer (some people here were encountering the occasional LO who would tell them that Alliant did not offer a $500 sixty-month SSL).

As far as you subscribing to Credit Check Total, that would be lovely if you are sure you don't mind.  It will be one more data point for how much benefit people are getting to their FICO 8 from the SSL Technique.  (And while you are at it, you can tell us how much your Vantage scores change as well).

Be sure to research how to get the 50% reduced rate for CCT.  I think it involves cancelling on Day 6 of the free trial and then they offer to give you half off if you stay.  My own personal advice is that down the road you should consider scrapping CCT altogether, since there are now so many free methods of obtaining your FICO 8 classic and your credit reports.  (In this case, however, it will be nice for you to have CCT since you will be able to time a simultaneous pull of your FICO 8 from all three bureaus.)  That's just my opinion, however-- many people love CCT and find the $15/month well worth it.

[Whitebird]

Hi CGID -

As long as you're collecting data points here are a couple, one of which you mentioned above in your reply to Kak.

In terms of Vantage 3 scores, mine changed not at all. Since I have had a savings account at Alliant for a long time, it seems I've been signed up for Vantage Scores not full reports. Not sure which CRA is used for that. In the past year my Vantage 3 scores at Alliant have ranged from 828 through 831 at the same time FICOs were 818-822. Current scores are in my sig.

I recently signed up for Credit Karma only to verify who reported what when. For that purpose, it's good. The Vantage scores I just pulled from them are Equifax 829 and Transunion 830. What's interesting here is how they have classified the SSL from Alliant. It is listed under "Other" along with a bank line of credit from Citi open since the late '70s (!). The Citi account is a revolver (and reported as such in FICO reports). So, two accounts under "Other." Apparently the only installment credit Credit Karma reports as such is a mortgage and/or auto loan. Therefore, according to Vantage, my "mix" of credit has not changed. Frankly, I don't care about Vantage for obvious reasons.

Oh yes, to the other point - I have to assume that all who were missing up-to-date data from the Alliant SSL as reported by Experian last month--I was one--now have the correct numbers. I did pull a 1B FICO just for Experian on Sept 8th and everything was reporting correctly. So, I don't plan to pay for scores/reports on a routine basis in the future as I can get Experian and TransUnion scores (only) provided by a few creditors. That's good enough as I normally have scores that vary very little.

I have to say I am impressed by the quality of information provided on this forum, especially if one is not in the repair/rebuilding mode. FICO itself does put out interesting papers every once in a while that can be accessed by the general public but the information I'm most interested in has always been just for their customers, not us plebs. That's fine. I totally respect intellectual property.

[Anonymous]

Hi Whitebird.  Thanks so much for that feedback.

As far as Vantage 3 scores, are you 100% certain that they did not alter at all?  That would mean being sure you had a copy of the scores drawn on date X where you also have reports for the same date, and then scores from a month later (say) with corresponding reports.  (The key thing about the reports being that it enables you to be certain that you have scores from before the Alliant SS loan posted and then again after.)

If so, that's very interesting!  It would be strong evidence that Vantage can tease out when a loan is an SS loan and that Vantage also disregards it completely in contributing to credit mix and installment utilization in a way analagous to FICO 8.  (I am assuming here that Vantage is enough like FICO that it does care about credit mix and does care about installment utilization to some extent.  I am assuming that if you had added a car loan, for example, to a profile that had no installment loans, and also paid most of it off, then Vantage would give you some points for it.)

If you don't mind doing one more thing for the sake of science, you might find it interesting to pull your EQ or TU report from AnnualCreditReport.com.  It would be interesting to see how the Alliant loan is classified in the full-blown true ACR report.  Curious to see if it has any unusual "tags" on it -- I think it is interesting that your Karma-supplied reports classified it as an "other" account.

[Whitebird]

Note: CGID - I had my reply to you all complete but when I tried to post I got an "authentication failed" notice and everything went into the ether. This is my hastily written second reply and I fear I rushed through it.

I'm a bit confused here, but as I said my Vantage scores for the past 4 quarters (Sep 2015 through June 2016 - do not yet have the Sept 2016 score) ranged from 828 through 831 and have not changed within those tight parameters. Sept 2015: 828; Dec 2015: 829; March 2016: 831; June 2016: 830. I get these scores quarterly and Alliant does not supply precise dates pulled, just the months pulled. No reports, just scores. My SSL originated in May.

Now, I have the Credit Karma Vantage scores of 829 (Equifax) and 830 (Transunion) respectively from the report dated Sep 5 (using August data) again not changed from any of the Alliant Vantage scores, even though the dates are not exactly the same. That's what I meant by "not changed." Not sure when or how my scores could have changed.

Anyway, it's not possible to compare data as you outlined as I don't have exact dates Alliant pulled Vantage (or will pull Vantage for Sept). Personally, I'm satisfied that my Vantage scores have not changed beyond the parameters given.

Credit Karma lists the following types of credit individually: Credit cards, real estate, auto, student and other loans. The SSL is identified under the general category of Other, then as Secured, but not installment.  I don't think CK necessarily has to "tease out" a loan as a SSL as Alliant reports it as a Share Secured Loan on its site, and I'd have to believe that they report it as such to the bureaus. (FICOs all report it as a Secured Loan.)

CK seems interested in specific installment loans as noted and anything else not a credit card seems to be dumped into the general category of Other. As I said, I have a longstanding line of bank credit, listed on all FICOs as such revolving, and on all annualcreditreports as a revolving line of credit account. On Vantage that is dumped into "other" although it is unlike a SSL--nothing secured about it.

I'll get around to pulling an ACR report at some point, but not right now.   I save those ACR for times when I specifically need them and right now I don't. My SSL is correctly reporting on all FICOs and I have no real interest in seeing how it reports on the ACR. If I cared more about Vantage, that would be different but I don't.

I'm thinking there must be others who have had regular CK reports and scores and have subsequently gotten a SSL. Perhaps they could be encouraged to report whether or not CK scores have changed substantially after the SSL.

[Anonymous]

Hey WB.  Sorry for any confusion regarding my phrase "tease out."  I just meant, assuming the SSL causes no significant chamge in Vantage, it must be because Vantage is utilizing the various tags that creditors supply to the CRAs on their accounts, and specifically that their model must be ignoring secured personal loans in terms of credit mix and installment utilization.

(I also admit that it is possible that the Vantage model is so wildly different from FICO's that it wouldn't give you a benefit from having any installment loans of ANY kind and/or paying them down -- but that this struck me as improbable.  So if you are getting no benefit at all it suggests that it must be the fact that it is a secured personal loan that Vantage is ignoring.  Very interesting to my mind!)

PS.  I totslly know what it is like to craft a long reply on here and then have it eaten by the MF site.  ARGGGGHHHH! 

[Anonymous]

PPS.  I will do a pull of my true EQ and TU reports next month via ACR and let you know how they categorize my $500 Alliant SS loan.  One of the benefits of living in Georgia is that I am entitled by state law to three ACR pulls for each bureau.  That used to be an especially nice thing before EX started giving free monthly reports.  EQ and TU of course have been available free from Karma for years.

[Anonymous]

Hi folks,

Just wanted to share my experience, specifically regarding VantageScore 3.0 and CreditKarma. My VS score actually took a hit, though I'm not sure if it was specifically due to the SSL. When my report updated, only two things changed: utilization (from 0% to 12%; only have 1 card) and the SSL from Alliant reporting with a $43 balance. When this happened, my score dropped from 686 to 673 (my reports are clean but are just thin). I believe that this may have been the result of the utilization change more than the SSL reporting, but unfortunately there is no way for me to definitvely know. I assume that even if the SS loan did not bring down my score, it did nothing to increase it in terms of the VantageScore. On the other hand, my FICO 08 from Discover's Credit Scorecard (TU) jumped from 707 to 749, so I'm very happy about that. Thanks again to CGID for this!

[Anonymous]

Thanks for the kind word, YTR.

When you say that your util on your card went from 0% to 12%, was the balance on that card a true $0?  Or was it just a very small amount?

You are right that we have a lot of confounders going on.  On the positive side we have:

Going from all of your cards reporting $0 to at least one card showing a positive balance

No open installment accounts present to one open installment account present, also with a low installment U (this positive factor might be being ignored by the VS model).

On the negative side we have:

Going from most of your cards showing a $0 balance to all of your cards showing a positive balance

Going from an ultralow utilizatio to a util of 12%

A new account

A lower AAoA

Another question for you.  Did you have no installment accounts of any kind on your reports, including closed ones?  I wonder if Vantage treats profiles with closed installment accounts as more of a positive than does FICO -- in which case we'd expect the SSL Technique to help less.

As a closing practical note, a step that will help you a fair amount is to begin looking around for a few more credit cards that you feel like you could really like and keep around for a long time.  (There are many sweet no annual fee cards out there.)  If you had three cards, then it would be easier to please the scoring models.  They punish you for having all your cards at $0, but they also punish you when most or all your cards show a positive balance.  The trick is to have at least 3 cards and then (whenever you want your scores to be at their highest) have most of your cards reporting $0 except for one showing a small positive balance.

Adding a few more cards will also make your profile "thicker" which is good for many reasons.

[Anonymous]

Hey Whitebird!  One more thought.  Can you remind me whether, prior to adding the Alliant loan, did you have any closed installment loans on your reports?

I wonder if Vantage treats profiles with closed installment accounts as more of a positive than does FICO 8 -- in which case we'd expect the SSL Technique to help less.