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Share Secure Loan SSL installment $500 vs $10k..how much?

Member

Share Secure Loan SSL installment $500 vs $10k..how much?

Any advantage to a higher $ amount for using the Share Secure Loan Technique to improve credit mix?

 

I am specifically curious to know if a higher $ amount would help obtaining CCs with a higher SL.

I am also curious to know if a higher $ amout will do more damage than good.

(less interested in the interest issue...plan to pay it down to ~$50-100 asap.)

 

I have applied for Alliant SSL for $500. App is pending confirmation and I am having second thoughts about the $ amt

...and if I shoud get SSL in the first place.

I've deposited $12k...if bigger is better I may change the SSL to $12k

 

 

Made the mistake of checking credit reports for 1st time ever...after SSL app. I was surprised by an old installment load reporting on EX & EQ which is raising my oldest acct from 5 months to 22 yrs!

 

 

EX FICO 754 (via Discover/creditscorecard.com). open 1, closed 1,  oldest 22yrs, inq 1, clean

TU FAKO 684/681 (via CAP1 & CK) open 1, closed, 0, aaoa 5 months, oldest 5 months, inq 1, clean

EQ FAKO 727 (via CK) open 2,  closed 0, aaoa 11, oldest 22, inq 4, clean

 

CAP1 Secure opened 3/16 SL $500...just got $300 SL increase which is not reflected on the above CK & DIsco scores.

 

FICO 8:

EX 815 (5/11/2018: 1 inq, aaoa 7yr4mo, aoya 7mo, oldest 24.2 yrs)

TU 784 (5/1/18: 0 inq, aaoa 1yr5mo, aoya 7mo, oldest 2yr1mo)

FAKO: EQ 767 (5/11/18; 0 inq, aaoa 1yr5mo, aoya 7mo, oldest 2yr1mo )



TL: PLOC $0/300, opened 1994 (only reports on EX) | CAP1 Secure VISA ($0/500 opened 3/16) | Alliant SSL ($42.42/500 opened 9/16) | AMEX BCE $0/32,000 opened 12/16 | BOA WWF Cash $400/12,000 opened 9/17
Message 1 of 12
11 REPLIES
Community Leader
Super Contributor

Re: Share Secure Loan SSL installment $500 vs $10k..how much?

Most people who use the SSL technique report an increase of 30-40 points.  (This assumes of course that the person has no open installment loans of any kind -- the SSL technique is useless for people who already have one of or more open loans.)

 

Are you hoping for an increase of more than 30 points -- is that the reason you want to do a larger loan?

 

I don't know of any evidence that FICO will give you more points for a $1000 loan that is 96% paid off than a $500 loan that is 91% paid off.  I can't imagine that there is harm in the higher amount either though (which you also ask about).

 

It sounds like you are also thinking that you maybe don't want to add an SS loan at all -- perhaps you can shed some light on that.  On the one hand it sounds like you want more than the 30 points people normally report, but on the other hand are also contemplating adding no loan at all (which will guarantee you get 0 extra points).

 

You write:

 

I am specifically curious to know if a higher $ amount would help obtaining CCs with a higher SL.

 

Can you tell us how you are using the abbreviation SL?  Some people use it to mean Starting Limit and some people use it to mean Spending Limit.

 

I know of no evidence that the original amount of an installment loan appearing on one's report has a causal relationship, however slender, with the limits that credit card issuers grant.  That is overwhelmingly driven by three things: your credit score, your existing debt, and your annual income.  Also of some importance is how much revolving credit that issuer may have already granted you.

 

Here are some suggestions which you can take or leave as seems best to you:

 

Look into what credit card issuers are very likely to do their pull with Experian or Equifax but not TU.  Then make a list of cards that you really like and begin judiciously and slowly appying for these.  Your score will be much higher with EQ/EX due to that vastly higher age granted by the old closed loan, so you want to be applying for cards that avoid a TU pull.

 

Find out when that loan is estimated to fall off of EQ and EX.  As part of your credit plan for the next three years, make sure you have obtained at least two more credit cards that you can keep indefinitely before the loan falls off.  Your score would be enhanced a good deal by having three cards -- especially if (whenever you need maximum points) you make all your cards report $0 except one (which reports a small positive balance).

 

Learn techniques for controlling the exact amount that your CCs report to the credit bureaus.  You actually don't need big credit limits at all.  You just need a low utilization, which can be achieved with low limits just by making sure that the debt reported is small.  Of course, there's nothing wrong with gradually getting bigger credit limits over time -- it's just that they do not in themselves help your credit score. 

 

Do the SS loan with Alliant.  You have already applied for a $500 loan -- you will probably be creating unnecessary complication for yourself and the lender if you try to change the amount now.  It will give you a solid number of points across the three CRAs.

Message 2 of 12
New Contributor

Re: Share Secure Loan SSL installment $500 vs $10k..how much?

Are student loans considered

Share Secure Loan SSL???

 

Message 3 of 12
Established Contributor

Re: Share Secure Loan SSL installment $500 vs $10k..how much?

@Shannon
Secured loans are loans with some kind of collateral such as auto, mortgage or the case of a share secure loan a cash deposit.

Student loans are unsecure with nothing for the bank to repo.

For scoring purposes it doesn't matter if it's secured or unsecured.
Message 4 of 12
Valued Contributor

Re: Share Secure Loan SSL installment $500 vs $10k..how much?


Shannon_27 wrote:

Are student loans considered

Share Secure Loan SSL???

 


Student loans are considered installment loans, not ssl's. That being said, if you have student loans ( installment) you don't need and won't benefit from ssl's ( also installment). 


Current Scores 3/2016 Equifax 676 Transunion 697 Experian 648 Goal Scores: 720's accross the board. Gardening Goal: 3/2017
Message 5 of 12
Member

Re: Share Secure Loan SSL installment $500 vs $10k..how much?

@Dixie,

Thank you for the detailled reply.

 

My primary goal for obtaining higher Spending Limit CCs is eligiblty for premium rewards cards such as the Chase Sapphire Reserve. Forum discussions indicate this card has a minumum Spending Limit of $10k & that Chase is unlikely to issue it to those who lack other cards with $10k+ spending limits.

 

Obtaining a potential 30 point gain is a one of my reason for seeking a SSL...regardless of the $ amount or impact on CC spending limits.

 

When I referrred to SL, I was referring to initial Starting Limits or Spending Limits ( which could have increased as a result of CLI).

 

I have been playing with the Credit Score Simultors at CAP one and CK, which indicate a higher Spending Limit for a new CC would result in a higher score boost (new $10 = +6 pts, new $10k = + 36pts.)....so as I get to higher limit CC(s), the higher my FICO scores will go up?

If this is the case...and if  the system can be gamed, then the sooner, the better.

 

My second thoughts regarding if I should do the SSL,  pertain to the  effect new accts will have on my AAoA.

Right now EQ is reporting an open Line of Credit (opened in 1994) which last reported on 11/2007. EX is reporting this same LOC as closed in 2008.

 

I am now guessing this old LOC will drop from reporting when the 10yr mark is reached...thus my AAoA will take a huge hit...especially with my thin file.

My concern is now the impact each new acct will have on AAoA.

 

I guess it really comes down to goals.

If I was to persue pre-qual for a mortgage, then there is now a soon to close window of optimum FICO scores....before my AAOA seriously drops.

If I was to persue premium CCs for signup rewards, same as above.

Adding the SSL will drop my AAOA from 11.2 to 7.5.

+1 acct = 5.5

+1 acct = 4.5

 

I'm thinking Now: I will do the SSL ...most likely for $500 for simplicity.

Then, add an AMEX Everyday (keep forever)....perhaps app before SSL reports, so AMEX is not spooked.

 

Perhaps in 3 months I will:

3x CLI AMEX.

Then go for an Alliant VISA CC (holiday signup bonus & request high starting limit..keep forever)....or not.

( I was wondering if the higher SSL specifically with Alliant would help support a request for a higher Start Limit on an Alliant CC?)

 

 

Then in 3/2017:

Prequal for mortgage (My income is seasonal & this will be my peak $$$$$ month, my CAP 1 CC will hit 1yr & potential new AMEX will hit 6 months and AAoA will still have 22yr old acct in consideration)...or not... I'm on the fence regarding home ownership, but i could use a tax break & investment income from rental.

 

...or go for Fidelty VISA CC (keep forever).

That will leave room for a Chase Sapphire (reserve or preferred....PC to freedom after bonus, then keep forever) when I am more likely to be approved & within 5/24 rule

btw..I have the income to support the premium CC apps & higher limits ... ~$150k/yr...

 

So back to the original inquiry, given the above goals & concens still wondering about $500 vs $10k+for the SSL....and uninteded consequences

especially given this recent reply from WhiteBird in the big SSL thread (pg 47):

"

In the past couple weeks or so, I've gotten unusual offers from my creditors--never anything like this before. They made no sense to me but now I think I understand. LMAO!

 

First, Amex sent me an offer to reduce my APR from whatever it is--around 11-12% I think to 6.99% for a year I've had this card for over 30 years, have never carried a balance. Why now? Then, Chase sent me checks in the mail (going to call them and STOP IT) to use as I like, also a low APR. Then, to top it off, I got a letter in the mail from the bank where I have a LOC. They wanted to tell me that they have "approved" me for an increase in my LOC! Never mind that I have never used it! No hard pull either.

 

Ok, this is my take on what happened. In their routine review of my CR, these guys have seen that I suddenly have a secured loan!!! It's the first time they've ever seen a loan on my account. It's as though they are saying, Whitebird, we had no idea that you needed a loan--why didn't you say so!!! We'll be happy to accommodate you. No need to go elsewhere! I'm still chuckling over this...

"

 

FICO 8:

EX 815 (5/11/2018: 1 inq, aaoa 7yr4mo, aoya 7mo, oldest 24.2 yrs)

TU 784 (5/1/18: 0 inq, aaoa 1yr5mo, aoya 7mo, oldest 2yr1mo)

FAKO: EQ 767 (5/11/18; 0 inq, aaoa 1yr5mo, aoya 7mo, oldest 2yr1mo )



TL: PLOC $0/300, opened 1994 (only reports on EX) | CAP1 Secure VISA ($0/500 opened 3/16) | Alliant SSL ($42.42/500 opened 9/16) | AMEX BCE $0/32,000 opened 12/16 | BOA WWF Cash $400/12,000 opened 9/17
Message 6 of 12
Community Leader
Super Contributor

Re: Share Secure Loan SSL installment $500 vs $10k..how much?

Hello BlueSky.  You write:

 

I have been playing with the Credit Score Simultors at CAP one and CK, which indicate a higher Spending Limit for a new CC would result in a higher score boost (new $10 = +6 pts, new $10k = + 36pts.)....so as I get to higher limit CC(s), the higher my FICO scores will go up?

If this is the case...and if  the system can be gamed, then the sooner, the better.

 

Having higher credit limits on your credit cards does not in itself help your FICO score -- not even the slightest bit.  Let's take as an example Bob and Fred.  Both have exactly 4 credit cards.  Both have exactly the same total utilization (say 15%).  Both have two accounts at $0 and the other two are reporting a positive balance.  In all other respects their credit profiles are the same: age, number of lates, etc.

 

The difference is that Bob's cards each have a limit of $500.  Fred's cards each have a limit of $20,000.

 

Fred and Bob will have the same FICO score.  Fred's big credit limits will not help him at all -- in and of themselves. 

 

What the simulator is probably basing its prediction on is that if a particular person holds the dollar amount of his debt steady (no change) and then he gets a big credit limit increase, then his total utilization will necessarily go down.  If his total U had been medium to high, then the decrease to a lower amount would likely help him.

 

But the key thing to observe is that Budget Bob can keep his utilization just as low as Fancy Fred.  No reason Bob can't have a utilization of 1-4% and still spend a lot of money on his cards.

 

I agree with you that you need to choose one goal as primary, and then create a plan to achieve that goal, with the plan only considering other goals to the extent that they do not in any way impede the timeline of the primary one.

 

Most people who are thinking about home purchases allow that to be the driver.  If so, I think you'll need to scrap the idea of Chase's most recent hyper-premium card (which will not help your score anyway).  You can work on that after you get your home.  If you think buying a home before the old old tradeline falls off is realistic (without rushing) then that makes sense -- assuming you really want one.  Home ownership is a bit of an idol that America irrationally worhsips, in my opinion.  It makes sense when you love the property and plan to live there for quite a long time.  If you think you might move, there's a lot of headache in selling again (including substantial cost and risk of loss) that offests any imagined financial gain -- that's just my opinion for whatever it is worth.

 

 

Message 7 of 12
Moderator

Re: Share Secure Loan SSL installment $500 vs $10k..how much?

For what it's worth, old information regarding big lines beggetting big lines isn't as prevelant in the market anymore.

 

Chase in particular has been doing some shock and awe type approvals (I got approved for 22K on my CSP when my largest limit prior to that was 9K) for at least the past year (14 months in my case) and there's plenty of other posts in approvals similar to that as well.

 

Pretty much can shortcut a lot of the old tricks like a large deposit secured card that was a route to solid CL's back in 2012 and earlier... market is fundamentally different now.

 

I don't think any installment loan has really played into that; I'd actually argue the smaller number is better anyway in case someone ever factors that minimal balance and the actual reported payment on it to a DTI calculation at some point.  Unintended consequences, and since there's no benefit from a scoring perspective unless you have other installment loans you're trying to offset (like if I dropped 30K into a similar share secured loan trick... even if they even let me do that size to make a dent in my awkwardly new mortgage) which on my data skews my installment ratios that were before pretty via Alliant and USAA, that there's little to no benefit and possible harm, so I'd never do it personally.




        
Message 8 of 12
Member

Re: Share Secure Loan SSL installment $500 vs $10k..how much?

I just closed my Alliant SSL in the amt of $500.

 

After playing phone tag for a few weeks the Chicago based loan consultant assigned to my case, I emailled my personal "Branch Member Service Consultant" (who had personally emailed me soon after opening my saving & checking accts). inquiring about an LA based loan officer since I live in Hawaii & time differences are an issue. I soon received a call from my personal rep. We spoke about the low vs high $ question. The rep said a larger SSL could be beneficial for those seeking future installment loans for larger amts, especially if there was a lack of history for large installment loan.....but not for CC starting limits (confirming @CGIDixie). I asked specifically regarding any benefit to a larger SSL when applying for an Alliant CC regarding starting limits....no additional benefit. Rep totally understood I was going minimal $ just for credit building & transferred me to a loan officer to close the SSL.

 

The loan officer went thru the confirmation process and asked if  I was interested in some form of insurance for the loan. When officer came to the part in the script regarding the increase to my payment...."its only 20 CENTS more..." , things got fun.

The officers said "wait, how is that even possible? Do really only want a $500 loan...are you sure?"

Me: Yup!

 

"....this is for 48 months....are sure you need that much time"

Me: That's fine.

 

We were done  60 seconds later & I was able to set the initial payment date for 10/7/2016 (they wanted 10/25 from now, but I upped it). Funds will be deposited into Alliant Checking...and I will pay this down to 9% by mid October.

 

Now awating eDocuments via email to to sign...

 

Thanks to CreditGuyInDixie and Revelate!!!

 

 

FICO 8:

EX 815 (5/11/2018: 1 inq, aaoa 7yr4mo, aoya 7mo, oldest 24.2 yrs)

TU 784 (5/1/18: 0 inq, aaoa 1yr5mo, aoya 7mo, oldest 2yr1mo)

FAKO: EQ 767 (5/11/18; 0 inq, aaoa 1yr5mo, aoya 7mo, oldest 2yr1mo )



TL: PLOC $0/300, opened 1994 (only reports on EX) | CAP1 Secure VISA ($0/500 opened 3/16) | Alliant SSL ($42.42/500 opened 9/16) | AMEX BCE $0/32,000 opened 12/16 | BOA WWF Cash $400/12,000 opened 9/17
Message 9 of 12
Community Leader
Super Contributor

Re: Share Secure Loan SSL installment $500 vs $10k..how much?

You are very welcome, Mr. BlueSky (shades of ELO!).

 

Curiously, some people have reported that Alliant is implementing a pure online approach to the SS loan application, including the piece that in the past involved a 1-on-1 conversation with a loan officer.  Instead of having that phone call, these folks just get an email stating that their 60-month $500 loan has been approved and gives a button they can click to finalize it.  I hope that becomes standard, which will eliminate the variance in what LOs say to the applicant (sometimes people get an LO that tells them they need to shift to a higher amount or a shorter time period).

 

I am sure you will be tracking your scores to see how much they change.  Let us know in the main SSL thread, if you don't mind.  Always happy to hear another case study.

Message 10 of 12