It just occurred to me that these "reindeer game" share secured loans are being factored into my "average age of accounts".
Holy cow I better stop playing.
@CreditMagic7 wrote:
@SouthJamaica wrote:It just occurred to me that these "reindeer game" share secured loans are being factored into my "average age of accounts".
Holy cow I better stop playing.
Well in some instances, adding a new SSL while some other accounts AAoA are clocking UP should offset that?
Not sure just grasping some straws but sometime this month i have 3 CC accounts crossing 2 years. I'll keep an eye on things and post the results as soon as they become available on this.
I guess I can't afford to stop playing the reindeer games. I just paid off a share secured loan & my scores plummeted 25 and 29 points.
@manyquestions wrote:
@SouthJamaica wrote:I guess I can't afford to stop playing the reindeer games. I just paid off a share secured loan & my scores plummeted 25 and 29 points.
Was that your only open loan? So now you have no open loans of any kind?
Yes it was my only instalment loan.
To me the moral of the story is that the FICO algorithm is pretty lame, and easily manipulated: the difference between a $500 loan with a $78 balance, and a $500 loan with a zero balance was 25+ points. Or put another way, by NOT PAYING $78 I would have ADDED 25+ points to my score.
Absurd.
@jamie123 wrote:
@SouthJamaica wrote:
@manyquestions wrote:
@SouthJamaica wrote:I guess I can't afford to stop playing the reindeer games. I just paid off a share secured loan & my scores plummeted 25 and 29 points.
Was that your only open loan? So now you have no open loans of any kind?
Yes it was my only instalment loan.
To me the moral of the story is that the FICO algorithm is pretty lame, and easily manipulated: the difference between a $500 loan with a $78 balance, and a $500 loan with a zero balance was 25+ points. Or put another way, by NOT PAYING $78 I would have ADDED 25+ points to my score.
Absurd.
But the algorithms aren't easily manipulated. It's only after much trial and error on this board that we find these algorithm factors that can change your scores. Sure, it's easy when you find the MyFICO forums and find out the so called "rules" that you should manage your credit with but until then you are pretty much at the mercy of FICO.
It is like standing outside a locked door with a keypad access. It would take you forever or be impossible to open the door by yourself, but if somebody was standing next to you and gave you the PIN the door is easily opened.
I mean before you found this forum, who would have thought that you would receive the best scores with 1 card reporting a small balance and all the others $0. Most people would assume that all cards reporting $0 would be best. The difference for me in those two scenarios is 18 points which is HUGE! I lose 18 points across the board if I pay all my cards to $0.
Same goes for these wimpy $500 share secured loans. Outside of MyFICO nobody else even mentions them as a way to increase scores. As a matter of fact, it was only 18 months ago that this was even thought of as a point boosting strategy on MyFICO. It has only been the in last few months that it was discovered that it was best to have the loan paid down to less than 10% remaining balance for best results.
It might seem easy once somebody informs you how it works but to find these little gems takes time and effort by many members like yourself. Anytime someone else like yourself tries these strategies and posts results to the forum we solidify the strategy and are able to nail down the specifics as to what the so called "rules" should be to make it work.
We can then spread that information, and it may seem easy to others that don't realize how much work went into the discovery of said information because, like the locked door with the keypad, once you know the PIN it's easy.
All right. I stand corrected. It's "pretty lame and easily manipulated once you know how" 
@CH-7-Mission-Accomplished wrote:This technique of opening and then paying down by 90% a share secured loan has me perplexed.
I worked in lending for a decade makiing mortgage and auto loans. This was way back in time.
With an installment loan, normally when you make a payment larger than the regularly scheduled payment, the excess is applied to the principal balance, but it has no effect on the next payment amount and due date. So your payment next month would still be required for the scheduled amount even if you paid off 90% of the loan this month. The net effect of making this massive principal payment is that it will simply cause the loan to payoff in the very near future. So your five year loan is now a one year loan.
That giant payment made early can either go to principal balance right now, in which case it would reduce the reported balance, or it would be considered prepaying the next 48 months worth of payments or whatever it is. That "prepayment" includes the interest due plus the scheduled principal due, so it is really held in a suspense account and applied each month, but does not reduce the principal balance.
I don't understand how you can get the benefit of making the next 48 monthly payment today (example) and still get the benefit of a principal balance reporting at just 10% of what it was.
Can someone help me understand this?
I have a share secured loan with BECU. If you make a payment 12 days or more before the due date, it will be applied to principal only. However, your next payment is due next month for the regularly scheduled amount.
This is the way the world normally works. If you make a massive payment on your mortgage, your regular payment is due next month for the regular amount and if you don't pay it you will be delinquent and reported this way.
Help me understand how you can have it both ways, please.
I have a $500 Alliant "share secured" loan. I paid off 82% of it, down to $90, and my online account statement says that the next payment due is March 1, 2019. And when it reports to the credit bureaus on about March 5th or 6th, it's going to say that the loan balance is $90.
I guess it reports differently than the traditional mortgage or auto loan reported.
How those types of loans report today.... I have no idea, since I have no experience with them, but I have a hunch that they do report the percentage of the overall amount due, without allocating principal and interest and without deciding the true payoff amount. E.g., if it's a 10,000 car loan, with principal and interest totalling 12,500, with 50 payments of 250 per month, and I were to immediately make a payment of $6500 covering the first 26 payments, I believe the lender would report my balance at $6,000, or 48%, even though -- as you well know -- my payoff amount would be much lower than that.
But admittedly, I'm just guessing.