Personal/Secured Loans help scores?

[Anonymous]

I want to raise my score in 90 days for a Biz Loan I'd like to get which will look at personal scores/history in large part.

If i take a 1-year personal loan and pay the bulk off in that time frame, will it help my score much? I'm thinking because it adds to my mix of credit, shows pre-pay and low balance it should.

If so, will it make a difference if secured vs unsecured?

Thanks in advance!

[haulingthescoreup]

Do you not have any kind of open installment product at the moment? --car loan, mortgage, HELOC, signature loan, etc.

If not, it might well help your scores via credit mix, but I don't know if the benefit from that would overcome the newness penalty by the time that you want your biz loan, if that makes sense.

Try playing with the EQ and TU sims on the "get a loan" option. It's no guarantee, but it might give you an idea of positive, negative, or no real change.

[Anonymous]

---

@haulingthescoreup wrote:
Do you not have any kind of open installment product at the moment? --car loan, mortgage, HELOC, signature loan, etc.

If not, it might well help your scores via credit mix, but I don't know if the benefit from that would overcome the newness penalty by the time that you want your biz loan, if that makes sense.

Try playing with the EQ and TU sims on the "get a loan" option. It's no guarantee, but it might give you an idea of positive, negative, or no real change.

---

Hi, I have no installments. In terms of new, that is going to be a negative regardless, got 3 new cards in feb/march (all paid well) and getting 1-2 more this month (no getting around the need)

So I'm just biting the 'newness' card in favor of good payments, good utilization. I'm betting a new card neg will be outweighted by knocking down utilization 10%-20%.

Fico Score Simulator, I might as well throw tea leaves from my cup. They said if I get a new $8 card and consolidate outstanding debt to it, I could go down 15 to up 17 points (703 - 733). If I pay my bills for 3 months I'll shoot to 750 - 760 and if I get a $10K w/o consolidating I'll hit the big bell at 848. If only...

[Anonymous]

Having 0 installments on your cr is bad. It should help to have it hit regardless of being a new account. The inq will sting a bit for 12 months. You should get a few points right away when it hits then a few more as your make payment history up to 24 payments of history I believe it keeps adding. Paying it off too soon may result in not gaining all the points for history. You get points for having it for x amount of months and also payments on time so you don't want to pay it off too soon because you could be cutting your self short. If you get the installment the points you get should make up for the inq being it is the first one. I'm going to guess you will get at least 10 points when it first reports. Also -6 to -10 points for the inq. Installments are better if kept a little longer. I got extra points on mine for keeping it longer. At least that's how it worked on my cr. With FICO 08 your need for an installment is even that much more.

Message Edited by ilovepizza on 07-14-2008 11:35 PM

[Anonymous]

---

@Anonymous wrote:
Having 0 installments on your cr is bad. It should help to have it hit regardless of being a new account. The inq will sting a bit for 12 months. You should get a few points right away when it hits then a few more as your make payment history up to 24 payments of history I believe it keeps adding. Paying it off too soon may result in not gaining all the points for history. You get points for having it for x amount of months and also payments on time so you don't want to pay it off too soon because you could be cutting your self short. If you get the installment the points you get should make up for the inq being it is the first one. I'm going to guess you will get at least 10 points when it first reports. Also -6 to -10 points for the inq. Installments are better if kept a little longer. I got extra points on mine for keeping it longer. At least that's how it worked on my cr. With FICO 08 your need for an installment is even that much more.

Message Edited by ilovepizza on 07-14-2008 11:35 PM

---

So far inquiries have not hit me that hard. Got 3-4 in the spring no big hit.

In terms of applying, I have one 'problem' in that i am returning to work after three years (home caring for dad), no tax returns. If I go to local bank and tell them that and ask for loan to help establish credit, say $5k, do you think that will fly?

[Anonymous]

How about a $600 loan. Loan is a loan. Many credit unions have what is called a minimum payment. So that might be $50. $50x12=$600 So you can take out a small loan.

Message Edited by ilovepizza on 07-15-2008 11:46 AM

[Anonymous]

installment loans are great. my credit started in 02/o2 when I took a 24 month $2000 co-signed, by 2004 I was receiving Prime no AF credit card offers, with the loan being my only tradline

Message Edited by rbbyrbsn on 07-16-2008 08:12 PM

[RobertEG]

IMHO, a short term plan to take out new credit for the purpose of securing new credit is something that I would take a serious look at.

You are looking at securing a business loan, so the creditor will do a hard pull, and llook at your entire credit history, with emphasis on recent activity.  The new loan will show up.  The creditor will clearly see in their manual review that you have not actually reduced your debt, just shifted it.

Sure, high revolving %util counts a lot more in FICO scoring that installment %util, so shifting the debt from revolv to install may give you a boost there.  But the new install loan comes with a price of  an inq. to secure the loan, and if you shop around, it may result in mulitple inquiries.  It will shortens your avg age of accounts, and will add a new install loan at 100% util.

Not a simple answer to proffer.