Adding an installment loan -- the Share Secure technique

[Anonymous]

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@Bigshrimp wrote:

CGID   Just wondering if there is any Data points you or others would like for me to try and capture before and/or after that you  have been wondering about... I get the 3B reports every 3 months from Myfico and next one due is Dec 21 but might wait a few days for last card to report...also have CK for my weekly reports and V3 scores

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Yes, BigShrimp!  As far as I know, nobody has yet tracked the benefit this technique gives to one's FICO 9 scores.  We have a lot of data on the benefit to FICO 8, but nothing on FICO 8.  Would you be willing to help us out?

If so, let me know, and I will give you some advice on how to set up your profile so that the test data you provide is reliable and meaningful.

[Anonymous]

You are the best thing since sliced bread, bubba!  Thanks so much for your research and thoughtful writeup.

I have one real quick question before I give any of ny thoughts.   With respect to NFCU you indicate that:

(a)  There is a maximum term length of five years if the SSL is for credit building purposes (not a home improvement loan)

but also

(b)  If you have a loan size of > $3000, then you can have a term length anywhere between 12-180 months

Those seem like claims that are in tension.  Basically, if someone wants to have an SSL for credit building purposes, and there is no home associated with it, and the person is fine with laying down $3100 for the initial security....

      ...is the term maximum 5 years or 15 years?

Can you shed any light on that?  Is it possible that the actual policy is this?

If the SSL is a home improvement loan, then the minimum SSL amounts are:
$250 for 6-12 months
$3001 for 12-180 months

If the SSL is not for home improvement (e.g. credit builder), then the minimum SSL amounts are:

$250 for 6-12 months
$3001 for 12-60 months

Bear in mind that almost nobody here will ever be interested in using this technique if they already have a home.  (It's theoretically possible of course -- they have paid off their mortgage, they have no other installment loans, and they want a 15 year SSL rather than the 5-year they get with Alliant.  Possible but very rare.)

Thanks again, Adidas!

[Bigshrimp]

Absolutly...Just to give you an idea of where my Fico 9 scores are

EQ-794  as of 10/16/16--Negative factors in order (Short history,  No recent no-mortgage installment,  Too many accounts with balance)

TU-716  as of 9/21/16--Negative factors in order (Collection, No recent non mortgage installment, Short history,  Too many accounts with balance)

EX-790  as of 9/21/16--Negavtive factore in order (Short history,  No recent non mortgage instaament,  Too many accounts with balance,  Heavy use of revolving credit)

Hope this helps you to understand where im currently at when giving adice...Just remember TU should jump in the next few weeks...

[Adidas]

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@Anonymous wrote:

You are the best thing since sliced bread, bubba!  Thanks so much for your research and thoughtful writeup.

I have one real quick question before I give any of ny thoughts.   With respect to NFCU you indicate that:

(a)  There is a maximum term length of five years if the SSL is for credit building purposes (not a home improvement loan)

but also

(b)  If you have a loan size of > $3000, then you can have a term length anywhere between 12-180 months

Those seem like claims that are in tension.  Basically, if someone wants to have an SSL for credit building purposes, and there is no home associated with it, and the person is fine with laying down $3100 for the initial security....

      ...is the term maximum 5 years or 15 years?

Can you shed any light on that?  Is it possible that the actual policy is this?

If the SSL is a home improvement loan, then the minimum SSL amounts are:
$250 for 6-12 months
$3001 for 12-180 months

If the SSL is not for home improvement (e.g. credit builder), then the minimum SSL amounts are:

$250 for 6-12 months
$3001 for 12-60 months

Bear in mind that almost nobody here will ever be interested in using this technique if they already have a home.  (It's theoretically possible of course -- they have paid off their mortgage, they have no other installment loans, and they want a 15 year SSL rather than the 5-year they get with Alliant.  Possible but very rare.)

Thanks again, Adidas!

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The text in red is exactly right. I was trying to keep things as brief as possible (believe it or not) so I condensed the info as much as possible. She said the minimum SSL amounts were $250 for anything less than 12 months (and 6 months is their minimum term, hence 6-12month window) and for anything 12-60 months aka 1-5 years the minimum is >$3000 so she used $3001 as an example. She then went on to discuss the home improvement and hesitated like she couldn't figure out the amount and then said "huh it looks like it's over $3000 too so $3001 as well". So perhaps she missed a section on the info sheet she was looking at and this info is incorrect because she did hesitate but I didn't think anyone with a deed would be concerned so I didn't follow up.

May I ask how you came across Alliant in the first place? Was someone coincidentally a member and figured this out? If so it seems likely other CUs may meet the goal of a >5 year loan even if the initial amount is high. If you found it elsewhere from someone that seemed like they had done some searching then this may truly be unique to Alliant.

Edit: so I suspect the red text is wrong once I thought about it, I don't think the home improvement option can be less than $3000 regardless of the time, but that's a minor point that isn't important for our discussion here

[Anonymous]

Hi Adidas.  The SSL technique was discovered by contributor Revelate and some other folks (in 2015 I believe).  They somehow figured out that Alliant of the various CUs they had tried was the most accomodating.

It doesn't mean that there isn't another CU that would work just as well, but we have not yet found one that is better.  The key way we can imagine a CU being better would be if it permitted very long terms, such as 15 years.  That wouldn't be a giant advantage over Alliant's 5-year offerings, but it would be an improvement.

You have confirmed that DCU and NFCU are basically inferior to Alliant.  DCU is terrible since you can't pay it down and keep it open.  NFCU is better than DCU, but Alliant does just as much with a $500 minimum amount (rather than $3000).

I think your personal plans are very well thought out.  You mention that, while you will be buying a house eventually, it's very possible it might not be till six years from now (say) and thus it may make more sense to get your Alliant SSL 3-4 years from now rather than today.  Very reasonable.

Are you fairly certain that you won't be buying a car either in the next four years?  If you think that a car purchase (with an auto loan I mean) is very probable in the next four years, that would be enough reason to grab the SSL soon, in my opinion.

[Adidas]

Yes unless my car breaks down I don't plan on buying another one. Of course if my car were to sudenly break down and I needed a new one I would't have the luxury of waiting for the SSL technique to kick in before I had to buy so I suppose if I thought a breakdown was eminent I should do the Technique now. However I'm pretty confident it will last another 5 years if I don't get in a wreck. So thank you so much for all your help and I have this post bookmarked for future use!

[newhis]

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@Adidas wrote:

Yes unless my car breaks down I don't plan on buying another one. Of course if my car were to sudenly break down and I needed a new one I would't have the luxury of waiting for the SSL technique to kick in before I had to buy so I suppose if I thought a breakdown was eminent I should do the Technique now. However I'm pretty confident it will last another 5 years if I don't get in a wreck. So thank you so much for all your help and I have this post bookmarked for future use!

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How about you get the SSL now and before it end you open another if needed?

A lot have change in less than 3 years that I started building credit in the USA. I don't need the SSL for the near future, but for me is better to have and not need... I will pay $20 for 5 years and have better score than now. My profile will be thicker with it (I think).

[Bigshrimp]

Well looks like I have to send in 2 forms of ID within 10 days to complete application...My DL may not be visable enough so have to order a new one...Not sure if it will arrive in time allowed...The second form of ID im good on...

[noobody]

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@noobody wrote:

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@noobody wrote:
I think I am the perfect candidate for this loan.

Around 800 CS with paid car loan dropped off my report 3 years ago.

All my 14 trade lines are credit cards.

AAoA 7 years, oldest account 21 years.

No negative info on report

Expect 20 points increase?

Opened saving account and transfer money on Friday, guess it will be available on Monday, then I can apply for the loan, I will report back with result.

Thanks OP for well written instructions and theory behind it.

One more question, does this loan count as new account as far as Chase 5/24 rule concerned?

I am at 4/24 after my CSR approval

Not that I will apply new Chase card any time soon, I am at Max exposure with them.

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@Anonymous wrote:

Hello Noobody.  You are a perfect candidate.  No installment accounts, closed or open.  A fairly thick profile with at least one old account and no derogs.

I will be immensely interested in hearing what benefit you get.  I would expect far more than 20 points in your case.  30-39 is more reasonable.  (As long as the increase would not bring you to 849, in which case it might be less.)

As far as the Chase 5/24 rule, that applies only to opening five credit cards in the last 24 months.  This is not a CC so the SS loan will have no effect on your 5/24 status.

Good luck!

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My first real FICO update is in.

EX FICO8 from discover jump from 793 to 832.

only other change is balance on my citi premier 2k/15K  >> 0/15K which i think is insignificant.

So, it is at least 35 points jump

Thanks CDG!

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My TU fico has been updated via Barclay and BOA, one point away from perfect score!! amazing!!

EX is lower because 2K balance been reported and more inquiry on it,

citi EQ is waste of time because it use 250-900 model, and it will not update for another 2 weeks

really really happy and million thanks to CreditGuyInDixie

[Anonymous]

Delighted things are working out so well for you.  :-)