You can do a shared secured loan through a CU. Alliant comes to mind. It will be a SP to join and no HP for secure $500 loan. There's a huge thread here on how to go about doing this http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Adding-an-installment-loan-the-Share-Secu... .
Personally I would add two more useful cards. This will help your overall utilization in the future. Having a good credit mix does have a positive affect on your scores.
Personally I would add two more useful cards. This will help your overall utilization in the future. Having a good credit mix does have a positive affect on your scores.
@Anonymous wrote:Here are a few thoughts.
First, regarding credit cards.
(a) Great that you have a plan for steadily paying off your credit card debt. You wiill have that paid off by January 1st, right? <-- yes Do that for sure and then continue to use your card, but make sure that you keep the balance that reports small. (But at least $5)
(b) You mention that you have a second credit card but that it is "inactive" and that you don't even have the card. That's a problem. Your goal here should be to take steps ASAP to obtain a new copy of the card from the issuer, emphasizing to them that you like the card and really want to be using it. Then begin using it. It can be for as little as a $5 purchase. But start using it. Allow the card to generate a statement with a positive balance and then pay it off after the statement prints. Due that for a few months in a row. It is very important to your credit score that you not lose that 2nd credit card account, and you are at risk right now of it being cancelled. Down the road you can reduce that card to $0 when you get ready to do your mortgage pre-approval, but right now focus on getting it back in the game. What if I don't know the card #? I have a partial card number on the CR report. Is that enough to get them to reissue a card or should they be able to find the card # from my SSN? I only used it once at the store (it's a store CC), and that was back in July 2010. But the CRs don't show it as closed in any way and I never closed it (that I'm sure of).
(c) About getting a third credit card. There are pros and cons to this given your timeline for buying a house. My own guess is that it makes sense to get a third card once you get some of your CC debt paid down, since it will enable you to have multiple $0 CC balances (which FICO likes, as long as it sees card with a positive balance). But get some advice from other people, especially those who have expertise in whether the old mortgage models might punish you for having a card opened less than a year before you close. Will do.
Second, installment loans:
You mention that you have a BOA installment loan on your report, but don't specify whether that loan is open or closed. Later on you ask: "Should I get a personal loan in order to have an installment account on my CR?"
I am guessing that you have a closed BOA installment loan on your report and that you are asking: "Should I get a personal loan in order to have an open installment account on my CR?" Am I right about both things? Yes, you're right on both points. Sorry about that. The BoA was a car loan, PIF and closed in 2013. Also, I have another car loan (never late) on my CR from my CU that was open, PIF and closed just last year (Dec 2015). Lastly, I have a mortgage (never late) on my CR that was PIF and closed in 2006.
Your goal is a mortgage. Having an open installment loan does not appear to benefit the EQ and TU mortgage scores (though it doesn't hurt them of course) as long as you have a closed installment loan on file. But... and this is important... it does appear to help your EX mortgage score to have an open installment loan that is mostly paid off.
What this means, as far as strategy, is that you cannot know whether getting a small personal loan is the right plan until you have gotten your CC debt paid off and you then (after that) pull your three mortgage scores. If the EX score is your highest score, then getting the personal loan makes no sense. It will just make your highest score that much higher, and as you probably know the underwriter will be looking at your "middle" score. OK. I will see what everything looks like in Jan. And I didn't know that the underwriter looked at all three scores since my CU said they pulled the EQ Fico Mortgage score. So thanks for that tidbit.
The good news is that it is totally doable, given your CC paydown plan, to wait until the CC debt is paid off, then make sure the two cards have fully updated all three reports with the new balances ($10 on one and $0 on the other, say), and then pull the mortgage scores. Assume that your EX score will go up 20 points from using the loan trick. The loan trick? Are you referring to the shared loan or something else?Sorry, I'm still new here and still learning. Then assess how much that will cause your middle score to rise.
There is a thread here on the Forum that will guide you step by step on how to add the loan and then pay it almost off but not quite. Do not try to figure that out yourself, but use the guidance. As I say, however, you should not decide whether you want to add the loan untill you have your mortgage scores in February. Ok and thanks for the link!
One final observation. You want to buy a house a year from now. It is likely that all lenders will still be using the same very old models for the "mortgage scores" that they do now. But.... it's conceivable that could change in the spring or summer. Unlikely but possible. So just make sure you watch that. People on this site will know if that looks likely -- so be sure to ask in six months from now again. Didn't know that! Thanks!
Also be sure to continue to pay your CC bills in full every month, once you get them paid off. Don't carry balances again. By paying them in full you will be establishing a history for yourself as a transactor, which mortgage lenders moving forward will like. Yes, I did learn that was something I was doing wrong from this site! Sad thing is, I purposely charge up the card thinking that by showing I could carry a large balance and paying more than the minimum, on time, was a good thing. Boy, oh boy, was I wrong. So now, I am getting the balance low and will have no problem keeping it low once it's down.
:
Thank you for all of your input. 
Being that your mortgage is a year off and with such a long credit history. I'd personally do it now. However, you can wait and do it right after signing for the mortgage. Your scores will drop temporarily when the mortgage reports regardless.
I've refinanced an auto loan in the middle of obtaining a mortgage. It wasn't a big deal nor did I need to explain anything.
Sometimes folks are a little OCD in the forums about this stuff. Lol
I'm sure you'll be fine either way you go.
Just don't carry balances on the CC's as stated before. PIF every month.
I've refinanced an auto loan in the middle of obtaining a mortgage. It wasn't a big deal nor did I need to explain anything.
Sometimes folks are a little OCD in the forums about this stuff. Lol
I'm sure you'll be fine either way you go.
Just don't carry balances on the CC's as stated before. PIF every month.
@Gmood1 wrote:
Being that your mortgage is a year off and with such a long credit history. I'd personally do it now. However, you can wait and do it right after signing for the mortgage. Your scores will drop temporarily when the mortgage reports regardless. Decisions. Decisions.
I've refinanced an auto loan in the middle of obtaining a mortgage. It wasn't a big deal nor did I need to explain anything.
Sometimes folks are a little OCD in the forums about this stuff. Lol
I'm sure you'll be fine either way you go.
Just don't carry balances on the CC's as stated before. PIF every month. That's for sure!
Thank you for all your input. I very much appreciate it.
@Anonymous wrote:Hello everyone.
I've been working on cleaning up my report and at this point, feel I have done all I can do in that arena. Now, I would like to turn my focus on maximizing my Fico scores. I have a short term goal of purchasing a home this time next year.
My current Fico scores are in signature line. My CU pulls from EQ. To get their best rate, I need atleast a 740 Fico 5 Mortgage score. I'm trying to determine what I should do after I get my util down to increase my score.
Current CR stats:
AAoA =13 yrs 1 m
Oldest account = 21 yrs
Last late payment = 4yrs 6m ago
13 accounts = 2 open, 11 closed
3 Inquiries = 1 in 2015, 2 in 2016
2 revolving lines = 1 active CC (at 69% util), the other inactive CC (0%)
2 derogs = 1 BofA installment (3 lates)
= 1 Tax lien (paid & released; remains on report)
The only debt that I have is a CC currently at 69% util. This will be down to <1% with even decreases over 3 months. The CC I have is new (Feb 2016) and the only one I have. It's 1 yr anniversary date will be in Jan 2017.
The Fico 8 simulator shows with the util% plan, I should see about a 60 point increase. However, I recently disputed 6 derogs and they have been removed from my TU and EX CRs. I'm still waiting on EQ. It is my understanding that I may be rebucketed as a result of the 6 derogs being removed and this may/may not lower my score a bit.
Should I get a personal loan in order to have an installment account on my CR?
I know this will improve my Fico score, but I'm concerned by doing so, a HP will be done on my CR increasing my INQ. I am already being dinged for the 3 INQ I have and don't want to lower my score any more than necessary.
I can easily get a personal loan from my CU and pay it down to almost nothing before applying for the mortgage if necessary. I learned from experience that if I get an installment loan and pay it off completely, Fico will ding me pretty hard, so I can leave a small balance to help my score and yet still have a small DTI when it comes time to apply for the mortgage.
The same question for CC: Should I apply for a new CC and will that help my score?
Since my UTIL will be down to <1%, I'm not sure of the benefit in doing this score-wise. I currently have only one active CC, the other CC is inactive and I don't even have the card. What I don't know is if by getting a new CC how would that new available credit hurt me in the eyes of the CU when I apply for the mortgage.
I don't need either a personal loan or a new CC, but I am simply trying to figure out how I might be able to maximize my Fico score without hurting my overall financial picture when I apply for the mortgage this time next year.
Thank you inadvance.
1. No you should not apply for another credit card.
2. You should keep both credit card accounts active, with one reporting at zero, and the other reporting at 9% or less.
3. The only personal loan you should consider is a share secured loan (credit union loan secured by share savings account) which has no HP. The best place I know to do that is Alliant Credit Union. You start a savings account with $500+, take out share secured loan for $500 with 48-month or 60-month payout, either decline autopay or cancel it after opening loan, pay the loan down to 9% ($45) immediately. When it reports you'll pick up points from that.
4. Send verification letters to the bureaus to try and get rid of the negatives (or hire a company to do that for you).
@Anonymous wrote:Regarding your store card that you cannot locate...
Give the store a call and explain that you have lost the card but really want to keep using it. They will probably ask you for some identifying info that you will have. First name, last name, address, social, birthdate, etc.
By the "loan trick" I mean the Share Secure Loan Technique with Alliant as your lender, documented in the link Gmood and I gave you. Ok. Yeah, I missed that.
PS. It's very likely that your closed mortgage will fall off your credit reports before you begin shopping for your new home. That's unfortunate, because it would look good to underwriters when they do their formal manual review of your reports to see that you had successfully managed a mortgage before.
It turns out that the mortgage was closed in 2009. Do you still think it will be off the report by the time I apply next year?
I encourage you to make copies of your reports soon where that mortgage is still being listed. Done and done.
Thank you!