Adding an installment loan -- the Share Secure technique

[panda11]

I have a mortgage on my CR, and buy adding an Alliant CU Secured Loan improved my EXP 2008 FICO by 14 points with a 50% util on the secured loan.  Has not seen an FICO update with a < 9% util yet.

[Anonymous]

Wow, Panda.  This would be a real crucial (and surprising) piece of information if we could be certain that your score increase was due to the SSL being added.  How much help would you be willing to give the broader community here on this?

We'd need to know stuff like....

*  What tools you are using to monitor your scores and reports? 

*  When were the last few reports dated?  Do you still have copies of them?  Same question for scores.

*  In the last 90 days, did you have any inquiries?  Any new accounts?  Did any inquiries turn 1 year old?

*  Do you know what your AAoA (Average Age of Accounts) is right now?  Your Age of Oldest Account?  Your Age of Youngest Account?

*  How many total accounts do you have right now?

*  Does your total CC utilization always stay low?  (1-7%)  If not, how has it varied in the last 60 days?  Have any of your credit cards gone from showing a positive balance to a zero?  Were all of your credit cards reporting a $0 balance any time in the last 60 days?

*  Have your reports ever had derogs?  Is it possible that your derog status has changed in the last 60 days?  (e.g. a derog falling off, a late payment aging to 1 year or 2 year or 3 year etc?

[Anonymous]

Ooh, I'm going to keep my eye on this conversation... 

BTW, my first score hit today as a result of my optimized utilization. TU went up 15 points on FICO 8. All I did was optimize my utilization for that gain. No other change.

[lisabobisa]

Being new to the forum, I am excited to employ the share secured loan technique. I have opened my savings and checking account with Alliant Credit Union and will make my deposit in about a week.

With the guidance of this forum, I have been on my credit repair journey for about six months. I am excited to see how the share secured technique will compound with the strides that I have already made.

After ignoring my credit for years, I enrolled in Credit Karma in July 2016 with scores in the mid-upper 400s. Since then, I paid a $500 collections item and was able to get the derogatory information deleted. This brought a boost of over 30 points. At this point I had no open credit lines, besides a defaulted direct student loan with the department of education, in the amount of about 9,000, including fees and penalties. I am currently in student loan rehab and I just made my first months payment in January. This defaulted student loan is presently the only source of any derogatory information.

Next, I joined Navy Federal and was approved for a $1700 platinum credit card with 17.49 interest. Around this time, I also opened a secured Capital One Platinum card with a credit line of $250. My new credit lines added about 20 points. I have been managing the utilization of my cards by ensuring my statement balances are $0 or less than 9%, alternating between the two cards.

Recently, I was successful in appealing to Capital One to remove a single 30 day late negative mark from my closed auto finance account that occurred in February of 2012. I sent the goodwill letter on 1/19 to the office of the president and received a call with the great news in just over a week. This removal has updated on Credit Karma, but only the Equifax side and I saw a boost of 74 points! The Transunion side of Credit Karma shows a boost of 34 points for other factors possibly including my optimal credit card utilization, but the derogatory information from my auto loan is still present in the Transunion details so I anticipate another significant boost in the coming days.

In January, I joined myFICO to get a more accessible and accurate picture of my credit report and scores. Presently my scores are EQ 591 TU 664 and EX 620. The deletion of the 30-day late has yet to be updated on myFICO. I anticipate a significant boost when this occurs in the coming days!

My next step is the share secured loan with Alliant. Meanwhile, I will stay current with my student loan rehabilitation, with the prospective completion in September 2017. I also plan to ask my dad to add me as an authorized user on one of his perfect and longest standing account, as my average age of (open) accounts is just a few months and my credit lines only total $1950. As an authorized user, I expect to see more points from improved optimization of these categories.

Since the beginning of my journey, I have not only seen great boosts in my score, but I am confident in my knowledge and ability to prove and maintain my credit worthiness. I owe a sincere thanks to all of you for your help!

QUESTION: Is there any benefit to opening up more than one share secured loan?

TIPS?: Do any of you all have any further recommendations or suggested amendments to my plan as I have described?

Thanks for listening and for any advice in advance!

[Anonymous]

My comments in blue below.

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@lisabobisa wrote:

My next step is the share secured loan with Alliant. Meanwhile, I will stay current with my student loan rehabilitation, with the prospective completion in September 2017. I also plan to ask my dad to add me as an authorized user on one of his perfect and longest standing account, as my average age of (open) accounts is just a few months and my credit lines only total $1950. As an authorized user, I expect to see more points from improved optimization of these categories.

QUESTION: Is there any benefit to opening up more than one share secured loan?

No.  One is all you need.

I admit to knowing almost nothing about how SL rehab works, but I assume it will end with you having an open installment loan on your reports (a student loan) on which you owe most of the original amount, but no negative marks.  The SS loan technique is intended for people with no open loans, as the guidance indicates, so we cannot promise you any improvement in your score.  Still, there is some question as to whether people with only SLs could benefit from it, so if you feel like you want to give it a spin, go for it.

TIPS?: Do any of you all have any further recommendations or suggested amendments to my plan as I have described?

I like your idea of being added to your dad's very old card as an AU.  The key factor that you will benefit from is not AAoA (though it will help that) but rather "Age of Oldest Account."  Your perception that getting a much bigger credit limit will help your score, however, is a mistake.  Big credit limits do not in themselves give you even a fraction of one point.  Anyone can control his/her utilization, precisely in the way you described earlier: by keeping one's reported balances small.  You can do that with no problem even if you have a total credit limit of $300.  In fact, unless you father's card always reports < 9% utilization it may harm your total utilization rather than helping it.  You should find out what that card's typical util is before you are added to it.

Thanks for listening and for any advice in advance!

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[panda11]

@CreditGuyInDixie

Well, easy question first, I used Discover and American Express FICOS, what troubleling is that the scores varied by 14 points, maybe it is just an anomaly on AMEX score.  But I will get all 3 scores from CCT next week.  Maybe there is no bounce like you said, but for $1.00 I will find out.

[Anonymous]

@CreditGuyInDixie and others - a Thousand Thanks!

Here are my my steps and DPs/Timeline for a Crazy/Fast and Easy set up on this...Took 24 hours from start to finish:

Started at Alliant's home page

Hit "Become a Member" button

On the far right of that page clicked under "Eligibility"  "Contributors to Foster Care to Succes" shot me to another page

On that page clicked button "Join FCS/Alliant Now" - shot me to the FCS Page (new window) - donated $10

Got an instant confirmation email from FC (didn't really need it for anything later)

Went back to open tab at Alliant and clicked button "I've already donanted"

Filled out App, account set up immediately (the online access set up was part of the app) - I never did get my full member number, didn't need it! - EDIT: I just saw that my full membership number is in the settings on the mobile app

I then set up my external CU Checking thinking I would need to fund through here - turns out this wasn't necessary at this stage (I was never given an option for fund account, but ACU put $5 in for opening deposit that showed there but not available funds) - I will use it when verified to transfer funds back out.

Setting up Mobile App and depositing a check from there turned out to be the way to expedite getting funds into the account - to me this was the key point to move it along fast! <<<<< @CreditGuyInDixie this may be worthy of adding to the front post???

Here was my 24 hour timeline:

Thursday 2/9/17 – 3:00pm Donated to "Foster Care Org" via link on Alliant's 

Thursday 2/9/17 – 3:01pm Opened Alliant CU Savings Account

Thursday 2/9/17 – 3:05pm Added Spire CU Checking to Transfer Accounts – Waiting for Deposits to Spire to Verify – after that, fund account and apply for SSL (was going to use this for funding)

Thursday 2/9/17 – Made Mobile Check Deposit of $520 in the evening (this was from my Company account, not sure if that mattered)

Friday 2/10/17 – 12:00p Deposit was approved and in account by noon

Friday 2/10/17 – 2:20p -  Got Email with approval and asking if I wanted the loan put into savings account

– I reply to the email "yes, let's move forward" and

- he responded with a 2nd email 2 mins later with "he will get me loan docs"

– after that received link to docusign 3 mins later, signed and done by 2:34p

– by 2:49 loan showed and $ in Account

– Paid Down loan $456 to leaving balance of $44

– Checked and "Scheduled payment" changed from 3/1/17 to 4/1/21 <<<EDIT: Still looks like it will go through if I can't cancel within 3 days prior

– I will check after 3/1/17 to verify if Autopay was pulled still. 

ALL Done by 3:00pm! (24 Hours)

Here are screen shots verifying the above:

[Anonymous]

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@Anonymous wrote:

@Anonymous and others - a Thousand Thanks!

Here are my my steps and DPs/Timeline for a Crazy/Fast and Easy set up on this...Took 24 hours from start to finish:

Started at Alliant's home page

Hit "Become a Member" button

On the far right of that page clicked under "Eligibility"  "Contributors to Foster Care to Succes" shot me to another page

On that page clicked button "Join FCS/Alliant Now" - shot me to the FCS Page (new window) - donated $10

Got an instant confirmation email from FC (didn't really need it for anything later)

Went back to open tab at Alliant and clicked button "I've already donanted"

Filled out App, account set up immediately (the online access set up was part of the app) - I never did get my full member number, didn't need it! - EDIT: I just saw that my full membership number is in the settings on the mobile app

I then set up my external CU Checking thinking I would need to fund through here - turns out this wasn't necessary at this stage (I was never given an option for fund account, but ACU put $5 in for opening deposit that showed there but not available funds) - I will use it when verified to transfer funds back out.

Setting up Mobile App and depositing a check from there turned out to be the way to expedite getting funds into the account - to me this was the key point to move it along fast! <<<<< @Anonymous this may be worthy of adding to the front post???

Here was my 24 hour timeline:

Thursday 2/9/17 – 3:00pm Donated to "Foster Care Org" via link on Alliant's 

Thursday 2/9/17 – 3:01pm Opened Alliant CU Savings Account

Thursday 2/9/17 – 3:05pm Added Spire CU Checking to Transfer Accounts – Waiting for Deposits to Spire to Verify – after that, fund account and apply for SSL (was going to use this for funding)

Thursday 2/9/17 – Made Mobile Check Deposit of $520 in the evening (this was from my Company account, not sure if that mattered)

Friday 2/10/17 – 12:00p Deposit was approved and in account by noon

Friday 2/10/17 – 2:20p -  Got Email with approval and asking if I wanted the loan put into savings account

– I reply to the email "yes, let's move forward" and

- he responded with a 2nd email 2 mins later with "he will get me loan docs"

– after that received link to docusign 3 mins later, signed and done by 2:34p

– by 2:49 loan showed and $ in Account

– Paid Down loan $456 to leaving balance of $44

– Checked and "Scheduled payment" changed from 3/1/17 to 4/1/21

– I will check after 3/1/17 to verify if Autopay was pulled still. 

ALL Done by 3:00pm! (24 Hours)

Here are screen shots verifying the above:

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Good job! That's quick! A word of caution though. Your auto-pay is probably still active. You should still attempt to delete it around Feb 27 or so. It's not the end of the world if a payment goes through on your original due date but it's something you definitely don't want to forget about. Otherwise, your 5 year loan will only last 5 months!

[Anonymous]

Many thanks to Liquid, Panda, Lisa, In-quire and all the other new folks for whom the technique is working out so well.  Great to hear from you!

[lisabobisa]

Thanks for your help! I will move forward with the share secured loan process. I will keep you all informed as to whether it has an effect, given, my currently defaulted student loans are my only open installment account. But again, I am in rehabilitation!