Adding an installment loan -- the Share Secure technique

[FiveOhFour]

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@Anonymous wrote:

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@FiveOhFour wrote:
pardon my ignorance please but scoring primer? I have a lot to catch up on, is that part of the fico Report or a forum topic or what

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@FiveOhFour look at the top of my signature it's linked for your reading pleasure 😉

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doh! it was right there all along. much appreciated

[Anonymous]

And great news NASA Federal credit Union apparently offers a $1500 SSL for 60 months that works. Post 7 of the primer has the link. Post 3 discusses other institutions that also qualify.

[Anonymous]

Thinking about giving this a try! A couple questions for folks that may be more versed in this sort of stuff than me 

1. Will this have any effect if I've got closed auto loans and student loans on my credit report already? (not sure where they fall in terms of "credit mix")

2. Does the "Pledge Share Loan" from Scott CU seem like the correct type of loan this would work for? Link here: https://www.scu.org/consumer-loans/?target=Signature%20Loans

I imagine it would take actaully trying it to figure out if the payment due date gets pushed back to the end of the term like we would want it to, but as far as the type of loan being referenced here, does this fall in line with what we refer to when talking about an SSL?

[Anonymous]

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@Anonymous wrote:

Thinking about giving this a try! A couple questions for folks that may be more versed in this sort of stuff than me 

1. Will this have any effect if I've got closed auto loans and student loans on my credit report already? (not sure where they fall in terms of "credit mix")

2. Does the "Pledge Share Loan" from Scott CU seem like the correct type of loan this would work for? Link here: https://www.scu.org/consumer-loans/?target=Signature%20Loans

I imagine it would take actaully trying it to figure out if the payment due date gets pushed back to the end of the term like we would want it to, but as far as the type of loan being referenced here, does this fall in line with what we refer to when talking about an SSL?

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@Anonymous any type of loan should work, as long as the maturity date doesn't get brought forward and this strategy works only if it is the only open loan on your file.

You are still receiving Mix points for the closed loans on your record, btw.

[FiveOhFour]

It’s not just the maturity date though right? We are needing the amount of the monthly payment to go down after we pay off the majority, right? Instead of staying the same and ending earlier? Or is that the opposite? Or is that exactly what you mean by maturity date? I apologize, I’ve lost my familiarity with the topic. Glad I am asking because I’m realizing I don’t even know entirely what it is I’m asking for. Do I want the length of the loan to be as long as possible? Or is there a sweet spot for the loan amount/loan length etc? Anyone willing to answer a few questions please respond with a summary and let me know if it’s ok to PM you, I have suffered a minor stroke after witnessing my mothers passing and it has had lingering effects on my mental processing power. For some reason conceptual understanding relating to numbers has been effected in an embarrassingly extreme manner.

[Anonymous]

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@FiveOhFour wrote:
It’s not just the maturity date though right? We are needing the amount of the monthly payment to go down after we pay off the majority, right? Instead of staying the same and ending earlier? Or is that the opposite? Or is that exactly what you mean by maturity date? I apologize, I’ve lost my familiarity with the topic. Glad I am asking because I’m realizing I don’t even know entirely what it is I’m asking for. Do I want the length of the loan to be as long as possible? Or is there a sweet spot for the loan amount/loan length etc? Anyone willing to answer a few questions please respond with a summary and let me know if it’s ok to PM you, I have suffered a minor stroke after witnessing my mothers passing and it has had lingering effects on my mental processing power. For some reason conceptual understanding relating to numbers has been effected in an embarrassingly extreme manner.

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@FiveOhFour no problem at all that's what we're here for I just may be off-line at times for a little while.

The sweet spot is is long as you can possibly get for a term. The reason is every time you open a new account lowers your average age, so the longest term possible is preferable.

yes the one thing you have to worry about is the institution is the type where when you make extra payments it pushes out the next payment due. So if you had a five-year loan and you paid four years worth of payments, the next payment would not be due for four years, for example.

Some institutions unfortunately when you pay extra, bring forward the maturity date for the end of the loan. So you have to make sure when you make extra payments that it pays forward payments, rather than bringing the maturity date closer and just going towards the principal and you having a payment due the following month.

some institutions actually let you choose whether it goes towards principle or next payments. You just have to make sure you're able to pay extra payments and it pushes out when the next payment is due and does not bring the maturity date closer. 

hope this helps if you need more clarification just ask. 

[Rottweilerlvr]

Do we know if NFCU pushes out the due dates?

[Anonymous]

I understand that this thread is several years old and newer, more relevant information is probably out there. That said, this explaination has been incredibly helpful and is so appreciated.

My question - Will this strategy be effective for the following scenario (and any predictions by how much):

• Mortgage Scores
  • EX - 681
  • TU - 700
  • EQ - 671
• 2 Open CC
  • 1 opened in 2013
  • 1 opened in 2014
  • Both under 9% utalization
• 1 Auto loan that JUST closed
  • Leaving zero OPEN installment loans
• Goal is to purchase a HOME within the next 3-6 months.

My concern is, though adding the installment would be effective, AAoA (assuming it only counts OPEN accounts) is 7.5 years. A new account would drop that to 5.3 (right?). Does the 2 year drop in AAoA create more negative than the added installment loan brings positive (meaning this thing backfires and score drops instead)?

Thank you for any feedback!

[SouthJamaica]

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@Rottweilerlvr wrote:

Do we know if NFCU pushes out the due dates?

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Yes it does.

[SouthJamaica]

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@Anonymous wrote:

I understand that this thread is several years old and newer, more relevant information is probably out there. That said, this explaination has been incredibly helpful and is so appreciated.

My question - Will this strategy be effective for the following scenario (and any predictions by how much):

• Mortgage Scores
  • EX - 681
  • TU - 700
  • EQ - 671
• 2 Open CC
  • 1 opened in 2013
  • 1 opened in 2014
  • Both under 9% utalization
• 1 Auto loan that JUST closed
  • Leaving zero OPEN installment loans
• Goal is to purchase a HOME within the next 3-6 months.

My concern is, though adding the installment would be effective, AAoA (assuming it only counts OPEN accounts) is 7.5 years. A new account would drop that to 5.3 (right?). Does the 2 year drop in AAoA create more negative than the added installment loan brings positive (meaning this thing backfires and score drops instead)?

Thank you for any feedback!

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In your situation I would not recommend it.

1. It would show up as a new account, which is the last thing you want when applying for a mortgage.

2. The whole SSL technique does little or nothing for your mortgage scores.