Adding an installment loan -- the Share Secure technique

[Anonymous]

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@Anonymous wrote:

How long did it take folks here to see the Loan on their Credit reports.

This is my time line so far

Nov 2016: Opened Savings & Checking Acct w/ Alliant

Feb 2017: Decided to do the SSL. Applied last wk of Feb

15, Mar 2017: Spoke with LO around mid March. Setup auto pay to Apr 1st

20, March 2017: Paid down loan to 15%

1, Apr 2017: Auto pay

4, Apr 2017: Cancelled Auto pay
5, Apr 2017: Paid down to 8.99%

When should I expect to see the update on Credit Reports. I read on a bunch of posts here that Alliant reports on 31st every month, but no alerts for me yet.

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Here is the relevant section of the Guidance (italics below).  I'll follow that up with a couple comments;

STEP 5: WAIT FOR THE LOAN TO REPORT

If you don't have a tool that allows you to pull your credit reports for free at least once a month, you should probably get one.  Credit Karma is a good cost free choice, though you can ignore their scores and any recommendations they give you.  It's hard to beat as a free method for seeing your reports, which Karma will give you as often as once a week.

Look for your loan.  Alliant reports all its loans for all consumers to the three credit bureaus on the last day of the month.  In theory if the LO finalizes your loan at least three business days before the end of the month, it would likely be reported at the end of the month.  That seems plausible anyway.  But it's also possible that they have to do some extra housekeeping before it reports the first time. 

Remember too that just because Alliant reports your loan to the credit bureaus on a certain date, it could take 3-4 business days before it appears on a particular bureau's report.  Some people here on the forum have experienced longer wait times than that for all kinds of accounts.  Just depends on the CRA, what its servers are doing, etc.

Today is Thurs March 5.  Between today and March 31 there has been three business days (Mon, Tues, Wed).  You should not be surprised if it takes more than four business days.

Remember too that it's possible that it might already be on one or more of your reports, but there might be some additional time that it takes for an "alert" to generated by your particular credit monitoring system (CMS).

Note also that since you did not pay the balance down to < 8.99% until April 1, that low balance will likely not be reflected next week.  Instead you will need to wait till May 10 or so (Alliant reporting it on April 30, and then you needing to wait another week or so for the update to be reflected in the CRA database).

[Poppa]

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@Anonymous wrote:

How long did it take folks here to see the Loan on their Credit reports.

When should I expect to see the update on Credit Reports. I read on a bunch of posts here that Alliant reports on 31st every month, but no alerts for me yet.

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My loan went through at the end of January. My Equifax reported it Feb 11th. My Transunion and Experian reported the loan March 8th.

I would expect from my experience that yours will report around April 8-11. 

[Anonymous]

CreditGuyInDixie wrote: 

I am preparing to buy a house soon,  Will this technique help my mortgage scores?

The technique is really intended to help a person with his FICO 8 scores, not his mortgage scores.  But... if you have no installment loans of any kind, including closed ones, then it's worth doing.  Also, if getting a 20 point boost to your EX mortgage score would change the value of your "middle" score, then again it is worth doing.  Otherwise it does not appear to help a person's EQ or TU mortgage scores.

Firstly, CGID, thanks for publicizing this knowledge in the clear and helpful way that you have done so.

I had a few questions about results people have had with use of the SSL technique for mortgage FICO purposes.

Just to make sure I understand, is what you are saying that an EX mortgage score boost of approximately 20 points has been observed even on files that have closed installment loans?

And in your experience, would these potential 20 points be showing up in a particular "reason code" accompanying the EX mortgage score for a file with no open installment loans (i.e., prior to utilizing the technique)? If so, which code would you look for?

Lastly, do you have some gauge of how many points on EQ and TU mortgage scores might (in the short to medium term) potentially be jeoparized as a result of the technique? (I would guess that it would depend on the number and age of other accounts on the file, and in particular whether the average age of accounts will drop below a full number....  Has anyone reported their experiences?)

[Anonymous]

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@Anonymous wrote:

CreditGuyInDixie wrote: 

I am preparing to buy a house soon,  Will this technique help my mortgage scores?

The technique is really intended to help a person with his FICO 8 scores, not his mortgage scores.  But... if you have no installment loans of any kind, including closed ones, then it's worth doing.  Also, if getting a 20 point boost to your EX mortgage score would change the value of your "middle" score, then again it is worth doing.  Otherwise it does not appear to help a person's EQ or TU mortgage scores.

Firstly, CGID, thanks for publicizing this knowledge in the clear and helpful way that you have done so.

I had a few questions about results people have had with use of the SSL technique for mortgage FICO purposes.

Just to make sure I understand, is what you are saying that an EX mortgage score boost of approximately 20 points has been observed even on files that have closed installment loans?

Yeah.  The factor you are benefitting from in that case is Installment Uitization, which is a factor from the heavily weighted Amounts Owed category in both FICO 98 (Experian mortgage score) and FICO 8.  FICO removed that scoring factor in FICO 04 (Equifax and TransUnion mortgage score).  A closed installment loan doesn't help you with IU (because it is closed) but it presumably does help you with Credit Mix.

And in your experience, would these potential 20 points be showing up in a particular "reason code" accompanying the EX mortgage score for a file with no open installment loans (i.e., prior to utilizing the technique)? If so, which code would you look for?

I don't have any experience with regularly pulling my mortgage scores and looking for reason codes.  I think I have seen my mortgage scores once.  And anyway my own experience wouldn't help, because I have had a mostly paid off open installment loan for a long time now (my student loan).

Lastly, do you have some gauge of how many points on EQ and TU mortgage scores might (in the short to medium term) potentially be jeoparized as a result of the technique? (I would guess that it would depend on the number and age of other accounts on the file, and in particular whether the average age of accounts will drop below a full number....  Has anyone reported their experiences?)

No, we have very few reports on this.  The impact will be on Age of Youngest Account and AAoA, and that varies hugely from person to person.  For some people, adding the SS loan would have no effect on either.  My feeling is that the following is a reasonable way to approach it.  Optimize everything about your profile asside from installment loans.  Pull your mortgage scores.  If a 20 point boost to your EX score would boost your middle score by at least 10 points, and that could make a difference in your rates, then do it. 

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[Subexistence]

Should I apply for SSL or wait for my Disco to graduate first?

[Anonymous]

Hey SubEx!  I didn't know what you meant by a Disco (aside from an appalling phase of music from the 70s) or for it to graduate (aside from disco's benighted followers to move on to a superior form of music).

I did some work though and figured out you were talking about a Discover card -- and that yours was probably secured right now but that Discover offers consumers a way for that card to "graduate" to an unsecured card.  Is this what you were talking about?

http://ficoforums.myfico.com/t5/Credit-Cards/My-Discover-IT-Secured-card-just-graduated/td-p/4532598

I know that a lot of folks talk in jargon and shorthand, but it's worth observing that many people won't always know what you mean.

There is no scoring advantage I know of to an unsecured card -- or any other reason to wait on pulling the SS loan trigger with Alliant.  Congrats on your recent scores in the 700s.  Sweet.  If you get started with Alliant now you should have a 30 point (ish) bonus by mid-May (likely a bit sooner).

[Subexistence]

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@Anonymous wrote:

Hey SubEx!  I didn't know what you meant by a Disco (aside from an appalling phase of music from the 70s) or for it to graduate (aside from disco's benighted followers to move on to a superior form of music).

I did some work though and figured out you were talking about a Discover card -- and that yours was probably secured right now but that Discover offers consumers a way for that card to "graduate" to an unsecured card.  Is this what you were talking about?

http://ficoforums.myfico.com/t5/Credit-Cards/My-Discover-IT-Secured-card-just-graduated/td-p/4532598

I know that a lot of folks talk in jargon and shorthand, but it's worth observing that many people won't always know what you mean.

There is no scoring advantage I know of to an unsecured card -- or any other reason to wait on pulling the SS loan trigger with Alliant.  Congrats on your recent scores in the 700s.  Sweet.  If you get started with Alliant now you should have a 30 point (ish) bonus by mid-May (likely a bit sooner).

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My bad, I did mean Discover It graduation. I'll be preparing to try it within the next few days once my school projects are out of the way. Oh yeah, applying for SSL wouldn't seriously affect my chances of Discover graduation right?

[Anonymous]

I am no expert on Discover's graduation process.  (I only just learned about it from you in the last two hours!) 

But I am guessing that Discover makes its G-decision based on your own internal behavior with them (purchases and payments on the card) and the external record of your behavior with others (i.e. a soft pull of your report and score on the day that you request to graduate.

The Alliant loan won't appear on your reports until May 2 at the earliest.  But all it will do when it does appear is make your score look better.  So unless you have reason to believe that Discover has some policy like "if any new account in the last 30 days then we decline the G-request" -- then you you should be fine.  To me that would be a very weird thing for them to do, but perhaps you should ask people more familiar with how Disover's process works.

[joltdude]

Shouldn't have any issues with the SSL interfering with your Discover graduation.... though discover has had some issues with graduating accounts and CLIs thats supposedly resolved....  The advantage of an SSL through alliant is theres no HP (yes some places HP for a SSL).... and you can pay most of it off early.. following CreditGuysInDixie steps...  This is another case of  now and let it age.. is a good thing.. plus it takes a little bit of time for it to report to everyone that 1. it exists and 2. youve paid most of it down.... 

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@Anonymous wrote:

I am no expert on Discover's graduation process.  (I only just learned about it from you in the last two hours!) 

But I am guessing that Discover makes its G-decision based on your own internal behavior with them (purchases and payments on the card) and the external record of your behavior with others (i.e. a soft pull of your report and score on the day that you request to graduate.

The Alliant loan won't appear on your reports until May 2 at the earliest.  But all it will do when it does appear is make your score look better.  So unless you have reason to believe that Discover has some policy like "if any new account in the last 30 days then we decline the G-request" -- then you you should be fine.  To me that would be a very weird thing for them to do, but perhaps you should ask people more familiar with how Disover's process works.

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[Anonymous]

Wanted to provide my experience with Alliant for SSL.  Applied online last Monday for $500 loan and requested email contact.  Received a phone call one week later, today, from a loan officer who:

-Verified couple security questions

-Verified 500.00 loan amount

-Verified 60 month term and rate

-Verified if would like auto debit for payment out of savings or another account. Told him savings fine.  

-I asked if I could mail in payments instead, he said could do that but higher rate if opt for non- auto pay, .4% increase I believe

-He said will email over docs to sign in an hour and will deposit loan proceeds into Alliant savings account

-Update: Loan docs recvd via docusign but noticed they included a disabilty/death insurance coveage in them for about $31.  emailed back to remove