Instant 20 point boost ! Secured loan success!

[Anonymous]

So my car loan from 7 years ago fell off my report. I'm in the middle of rebuilding with fico 08 score of 650.  I have no active installment loans showing and I read a great post about the alliant bank secured loan thread. I speak from experience when I say works. I got an instant 20 point boost.

I got a $500 secured loan with One Nevada Credit Union and immediately paid it down 90% so as soon as it posted it shows only a $50 balance. This is key because if it posts showing a full balance you could actually get a small drop in scores. Most people report 15-25 point fico boost. Keep in mind this only effective if you have no open loans on your report.

[Anonymous]

Nice job, but keep in mind that your maximum score gain is realized at 8.99% or less... so you paying it down to 10% still means you have a threshold to cross.  This is likely why you only received a 20 point gain, where many have reported 25-30 point gains from the SSL technique.  I say pay down another $6 and you'll then be able to provide some data points as to how much the 9% threshold is "worth" when you see your scores go up a bit more.

[Anonymous]

Thanks for the tip. I paid it down to 3 % balance and I'll update the results.

[Anonymous]

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@Anonymous wrote:

Thanks for the tip. I paid it down to 3 % balance and I'll update the results.

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Good job.  I venture to guess you'll scoop up another 5-10 points.  I look forward to hearing back from you on this, as it will provide others with a solid data point regarding that 9% threshold and how much SSLs are "worth" on either side of that break point.

[SouthJamaica]

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@Anonymous wrote:

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@Anonymous wrote:

Thanks for the tip. I paid it down to 3 % balance and I'll update the results.

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Good job.  I venture to guess you'll scoop up another 5-10 points.  I look forward to hearing back from you on this, as it will provide others with a solid data point regarding that 9% threshold and how much SSLs are "worth" on either side of that break point.

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When I went from 15% to 9% I scooped up 20 points.  Will be interesting to see if 10% really took OP only part of the way to the promised land.

[Anonymous]

No doubt about it.  If he were to scoop up another 20, that would be 40, which I'm not sure I've ever heard of anyone scoring that many points from the addition of a SSL.  For that reason, I'm going to guess he only grabs another 10.  For his sake though, I hope I'm wrong!

[Anonymous]

Won't this technique cause the loan to get paid off too fast?     

[Glen_M]

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@Anonymous wrote:

Won't this technique cause the loan to get paid off too fast?     

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It has to be carried out with someone who will structure payments  to occur over a fixed period of time -- so that if you make payments ahead of schedule, you simply have none due for the next X months or years, and will continue to receive "paid as agreed" type monthly reports to the CRAs for the entire duration.

[Anonymous]

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@Anonymous wrote:

Won't this technique cause the loan to get paid off too fast?     

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No.  You can read it about it here.  (Just the first three posts.)

http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Adding-an-installment-loan-the-Share-Secure-technique/m-p/4506756

Many banks offer an approach called "pre-payment."  This is where paying a large extra payment not only causes the principal to go way down (the amount owed), but it pushes the "due date" of the next payment way into the future.

In the guidance indicated above, we suggest Alliant, since it is a well-tested CU for this technique, offering no hard pull for joining the CU and no hard pull for applying for the loan, as well as low required loan amounts (starting at $500) and comparatively long terms (5 years).

[SouthJamaica]

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@Anonymous wrote:

Won't this technique cause the loan to get paid off too fast?     

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It would with some lenders. With others it doesn't. So you need to know how a particular lender reports it.