@Fernando1 wrote:I'm a foreigner and I've been building my credit history in the USA for 11 months.
I currently have 3 credit cards and 1 credit builder installment loan. This credit builder installment loan lasts for 10 years, and I have already paid a little more than 10% of the total due.
My FICO 9 EX (currently at 724) shows: "proportion of loan balances to loan amounts is too high".
My question is: if I get another credit builder installment loan with a shorter term, to reduce the average term and also the average percentage owed (paying immediately 50%, for instace), would this help improve my credit score?
The only way to get an increase is to get your aggregate installment utilization percentage to below 10%. So if you pay the next 80% on your existing loan, you will get a nice score boost.
Adding a loan will hurt, not help.
@Fernando1 wrote:I'm a foreigner and I've been building my credit history in the USA for 11 months.
I currently have 3 credit cards and 1 credit builder installment loan. This credit builder installment loan lasts for 10 years, and I have already paid a little more than 10% of the total due.
My FICO 9 EX (currently at 724) shows: "proportion of loan balances to loan amounts is too high".
My question is: if I get another credit builder installment loan with a shorter term, to reduce the average term and also the average percentage owed (paying immediately 50%, for instace), would this help improve my credit score?
@SouthJamaica wrote:The only way to get an increase is to get your aggregate installment utilization percentage to below 10%. So if you pay the next 80% on your existing loan, you will get a nice score boost.
Adding a loan will hurt, not help.
@Fernando1 what you want is a shared secure loan which will allow you to pay it down while pushing out future due dates. Not many shared secured loans will offer this.
I would assume you can't get into NFCU, but you might be able to get into PenFed, which I believe should offer this type of loan where you can take out a loan, pay off 90% of it and then your next due date is ~4+ years from now
this gives you the loan bonus and gives you the bonus for having a loan nearly paid off.
If you aren't planning to get any loans otherwise, car loan, mortgage loan, personal loan in the next 5 years, I would see if you can get into Penfed and that you can get a SSL with those terms where making payments pushes back the due date, otherwise just keep making payments on your credit builder loan and let time help build your credit.
edit: and if you do get that SSL where you can pay it off over 90% and push out future due dates, pay off the credit builder loan in full. you wouldn't need it any longer.
@GatoradeZeroGuy wrote:
@Fernando1 wrote:I'm a foreigner and I've been building my credit history in the USA for 11 months.
I currently have 3 credit cards and 1 credit builder installment loan. This credit builder installment loan lasts for 10 years, and I have already paid a little more than 10% of the total due.
My FICO 9 EX (currently at 724) shows: "proportion of loan balances to loan amounts is too high".
My question is: if I get another credit builder installment loan with a shorter term, to reduce the average term and also the average percentage owed (paying immediately 50%, for instace), would this help improve my credit score?
@SouthJamaica wrote:The only way to get an increase is to get your aggregate installment utilization percentage to below 10%. So if you pay the next 80% on your existing loan, you will get a nice score boost.
Adding a loan will hurt, not help.
@Fernando1 what you want is a shared secure loan which will allow you to pay it down while pushing out future due dates. Not many shared secured loans will offer this.
I would assume you can't get into NFCU, but you might be able to get into PenFed, which I believe should offer this type of loan where you can take out a loan, pay off 90% of it and then your next due date is ~4+ years from now
this gives you the loan bonus and gives you the bonus for having a loan nearly paid off.
If you aren't planning to get any loans otherwise, car loan, mortgage loan, personal loan in the next 5 years, I would see if you can get into Penfed and that you can get a SSL with those terms where making payments pushes back the due date, otherwise just keep making payments on your credit builder loan and let time help build your credit.
OP already has a loan. Adding a second loan will not help in any way.
@SouthJamaica wrote:
@GatoradeZeroGuy wrote:
@Fernando1 wrote:OP already has a loan. Adding a second loan will not help in any way.
they would pay off the credit builder loan in full as soon as they can get a proper SSL reporting paid off over 90%
it would be a credit hit now with the new account, but that credit hit would be worth it if it means for 5 years they'll have that part of their file optimized, as opposed to always reporting a high installment balance on that horrid credit builder loan imo
@GatoradeZeroGuy wrote:
@SouthJamaica wrote:
@GatoradeZeroGuy wrote:
@Fernando1 wrote:OP already has a loan. Adding a second loan will not help in any way.
they would pay off the credit builder loan in full as soon as they can get a proper SSL reporting paid off over 90%
it would be a credit hit now with the new account, but that credit hit would be worth it if it means for 5 years they'll have that part of their file optimized, as opposed to always reporting a high installment balance on that horrid credit builder loan imo
Thanks for the clarification. I don't think your post mentioned paying off the existing loan.