Mannerheim Posted March 11, 2005 Author Report Share Posted March 11, 2005 While I'm attacking the negatives on my report, I thought that I'd begin to pursue the options when it comes to adding positive credit.One common option is to open a secured bank loan at three or four local banks. No credit check, 2 years of payments. Everything seems fine. Whenever I read about this type of strategy, it suggests using $400 for each secured loan (which seems low to me).I visted the bank today (Comerica), and they told me that their secured loans started at $2,500, and that there was a credit check. I would appreciate input from anyone that has researched or initiated this strategy. It seems great, but $2,500 and a credit check seems to be contrary to what I've read about.Thank you for the help! Link to comment Share on other sites More sharing options...
Mannerheim Posted March 11, 2005 Report Share Posted March 11, 2005 While I'm attacking the negatives on my report, I thought that I'd begin to pursue the options when it comes to adding positive credit.One common option is to open a secured bank loan at three or four local banks. No credit check, 2 years of payments. Everything seems fine. Whenever I read about this type of strategy, it suggests using $400 for each secured loan (which seems low to me).I visted the bank today (Comerica), and they told me that their secured loans started at $2,500, and that there was a credit check. I would appreciate input from anyone that has researched or initiated this strategy. It seems great, but $2,500 and a credit check seems to be contrary to what I've read about.Thank you for the help! Link to comment Share on other sites More sharing options...
LadyButler Posted March 12, 2005 Report Share Posted March 12, 2005 I could be wrong... but that sounds insane!!!! Maybe the rep you talked with was confuzzled? I would assume that if you had $2500 just laying around, you'd prolly not be in your current state!? I'd get a second opinion from another bank. Definition:Banker- The guy who gives you an umbrella when it's sunny and demands it's return when it rains. Link to comment Share on other sites More sharing options...
LadyButler Posted March 12, 2005 Report Share Posted March 12, 2005 I could be wrong... but that sounds insane!!!! Maybe the rep you talked with was confuzzled? I would assume that if you had $2500 just laying around, you'd prolly not be in your current state!? I'd get a second opinion from another bank. Definition:Banker- The guy who gives you an umbrella when it's sunny and demands it's return when it rains. Link to comment Share on other sites More sharing options...
Shad626 Posted March 12, 2005 Report Share Posted March 12, 2005 I recently started this practice, commercial bank said it was a min 2k dollar loan, I went to T'ville federal bank and they said anthing over 500 dollars, the loan officer said the loan shows up as a regular loan not a secured loan and i pay a lesser interest rate than what my saving acount pays me to keep the money in the bank. Its up to the bank make sure they do not report it as a secured loan and they do not need a credit check since you have the funds there that they put a hold on until you pay off the loan. Link to comment Share on other sites More sharing options...
Shad626 Posted March 12, 2005 Report Share Posted March 12, 2005 I recently started this practice, commercial bank said it was a min 2k dollar loan, I went to T'ville federal bank and they said anthing over 500 dollars, the loan officer said the loan shows up as a regular loan not a secured loan and i pay a lesser interest rate than what my saving acount pays me to keep the money in the bank. Its up to the bank make sure they do not report it as a secured loan and they do not need a credit check since you have the funds there that they put a hold on until you pay off the loan. Link to comment Share on other sites More sharing options...
aints68 Posted March 12, 2005 Report Share Posted March 12, 2005 I'm in NC and I was being told the same thing by the commercial banks(2500.00), so I started looking into credit unions. You can't get into most of these without a qualifying employer or immediate relative who is a member, but there are a few who extend their membership to outsiders. You'll have to call each of them to find out who has outside membership available. But before you join, make sure that they do savings secured loans, AND ASK MORE THAN ONE REP!!! I checked with one place that I could qualify for, but they told me they didn't do these loans. Then I called 4 or 5 other credit unions that told me I didn't qualify for membership. I asked them anyway about secured loans and they all said they they do them. So I called the 1st on back and got a different rep who said that they do. These phone reps are not always as well trained as they should be, so be sure to dig until you get the correct info. For anyone living in NC, I was able to get into Coastal Federal Credit, but I have not actually applied for the secured loan yet. I'm going to wait about a week to do this. I will update this post and let you know how it works out in case you want to try here. Link to comment Share on other sites More sharing options...
aints68 Posted March 12, 2005 Report Share Posted March 12, 2005 I'm in NC and I was being told the same thing by the commercial banks(2500.00), so I started looking into credit unions. You can't get into most of these without a qualifying employer or immediate relative who is a member, but there are a few who extend their membership to outsiders. You'll have to call each of them to find out who has outside membership available. But before you join, make sure that they do savings secured loans, AND ASK MORE THAN ONE REP!!! I checked with one place that I could qualify for, but they told me they didn't do these loans. Then I called 4 or 5 other credit unions that told me I didn't qualify for membership. I asked them anyway about secured loans and they all said they they do them. So I called the 1st on back and got a different rep who said that they do. These phone reps are not always as well trained as they should be, so be sure to dig until you get the correct info. For anyone living in NC, I was able to get into Coastal Federal Credit, but I have not actually applied for the secured loan yet. I'm going to wait about a week to do this. I will update this post and let you know how it works out in case you want to try here. Link to comment Share on other sites More sharing options...
Mannerheim Posted March 12, 2005 Author Report Share Posted March 12, 2005 Thanks for the input. Please let us know whwt happens! Link to comment Share on other sites More sharing options...
Mannerheim Posted March 12, 2005 Author Report Share Posted March 12, 2005 Thanks for the input. Please let us know whwt happens! Link to comment Share on other sites More sharing options...
aints68 Posted March 18, 2005 Report Share Posted March 18, 2005 Haven't been to apply for my secured loan yet, but my better half already belonged to a credit union for a while, so BH went there to get one. SUCCESS!!! I went with to see what their process was like. It was very easy. The whole process only took about 15 minutes. They didn't do any checks or pull any reports. BH was straight up with the loan officer and told him reason for doing this was to build credit. Loan officer was helpful, said this was a great way to do that, and also informed BH that they also do secured Visas. He said that BH might be interested in that because scoring systems like to see both installment and revolving accounts. He was great about the help and the advise, better than any bank officers I've come across. Even better, BH did a $1000 secured loan and the officer said amount they would hold starts out at $1000 but after each payment was made, the amount they hold would decrease (so in other words in six months they would only be freezing about $500 in the account). He did state that not all places do this. Some hold the entire security until the loan is paid off. However, on secured Visa they do have to hold the entire amount because you have the ability to pay it down then run it back up again. This one also reports to all 3 credit bureaus, so I think BH hit the motherload here. The only bummer here is that I could not be added on because we have different addresses right now. Now that I see how it should go, I'm going to go ahead and try mine. Let you know how that turns out.PS: On another note, a regular bank that I have had a savings account with for awhile said that their minimum for secured loans is now $5,000.00! I've heard that a lot of the banks are increasing the minimum amounts for their loans, so I think the regular banks are probably out of the question for doing this. I also checked with a Savings and Loan type of institution about this. They do it against CD's on deposit with them but won't report your loan to the cra's. That really bites. Try your best to go to a CREDIT UNION. It seems that you will get the best help here. Link to comment Share on other sites More sharing options...
Mannerheim Posted March 18, 2005 Author Report Share Posted March 18, 2005 Hey aints,That's great info, I'll have to try to find a credit union that I qualify for!Thanks again! Link to comment Share on other sites More sharing options...
aints68 Posted March 25, 2005 Report Share Posted March 25, 2005 Mannerheim,I got my loan at coastal yesterday and it was really east - no credit check. One thing, however. My is done as an open line of credit account, while my BH's at the other credit union is done as an installment account. Make sure you know which one they are doing before you join because one may serve your particular situation better than the other. Link to comment Share on other sites More sharing options...
Mannerheim Posted March 25, 2005 Author Report Share Posted March 25, 2005 Hey aints,Thanks again for the info. I wonder what's a stronger credit score builder, and installment loan or an open line of credit.I'll post a query, and maybe we'll find out. Link to comment Share on other sites More sharing options...
aints68 Posted March 26, 2005 Report Share Posted March 26, 2005 I'm thinking that the open line because of the utilization score if you keep the balance low. That's just my guess though. A mortgage lender may use this against you if he thinks you have too much revolving debt and ask you to close it. If it has served its purpose though that's not such a bad thing. On the installment loans, some of the credit unions release funds as you pay down. So if you tie up 1000 on a 12 month loan, after about 6 months of payments in addition to your loan balance being smaller, part of your 1000 savings has been released for you to use (some of them don't do this though. They hold the whole amount until you close the loan.). On the revolving line, they will continue to hold your 1000 because since it is an open line, you can borrow on it over and over. In order to get your savings back, you will have to close the line which still may not a big deal since going the installment way, it would close out after the last payment anyway. And if you really need money you can just go in and borrow against your line. I mention all of this because I'm sure that when a loan closes it probably has an affect on your score too, so getting the line and keeping it open indefinetly should prevent that. I'm not sure about this though, maybe someone wise can give an answer to this. Link to comment Share on other sites More sharing options...
rising_score Posted June 2, 2005 Report Share Posted June 2, 2005 Has anyone tried this lately? Has it improved your scores? I just received a secured loan from my CU. (6 months / $500) I am hoping for a score increase since I have never had an installment loan before. Link to comment Share on other sites More sharing options...
Mannerheim Posted June 3, 2005 Author Report Share Posted June 3, 2005 Hey Risingscore,PLEASE let us know hoe it affects your credit over the next six months. Does your FICO dip first, then rise. or what?THANKS!! Link to comment Share on other sites More sharing options...
rising_score Posted June 3, 2005 Report Share Posted June 3, 2005 The loan just hit my Experian report today. Unfortunately, it tanked my score to 636! At the bottom of my fico report under "negative items" it states: "The proportion of loan balances to loan amounts being reported on your installment accounts is too high." I am hoping that after I pay 50% of this loan next month, my score will recover. I also need to get my overall utilization down, so maybe that will help. I just did this because I have never had an installment loan before, and I though it would help that component of my score. Link to comment Share on other sites More sharing options...
jq26 Posted June 3, 2005 Report Share Posted June 3, 2005 you'll be better off in 6 months...it tanked my score initialy but a month later it rebounded and then a month afet that, it was higher than the original score was. Plus another PAID IN FULL tradeline. Link to comment Share on other sites More sharing options...
rising_score Posted June 3, 2005 Report Share Posted June 3, 2005 you'll be better off in 6 months...it tanked my score initialy but a month later it rebounded and then a month afet that, it was higher than the original score was. Plus another PAID IN FULL tradeline.Thank you for the encouragement. I am looking to buy a condo in 6 months to a year, so I do have some time to recover. Link to comment Share on other sites More sharing options...
jq26 Posted June 3, 2005 Report Share Posted June 3, 2005 Sorry about the spelling. I'm in the office this morning and Lumberg is around. I followed the advice on this site and opened a secured loan with a credit union. The interest they are charging me is 3.5%. But I took the money and dumped it into an ING Direct account which currently pays 3.0%. The tiny spread between the two means that this loan is costing me less than $2.50. But for this nominal charge, I am building a relationship with the credit union, and forcing myself to save the money since I don't pay the loan payments out of the funds they gave me. Add the good TL on my reports and the bump in FICO score and its a no-brainer. I'm opening another loan next week and doing the same thing again, except this time I will try the unsecured route. If they deny then I will get another secured loan! Link to comment Share on other sites More sharing options...
late learner Posted June 4, 2005 Report Share Posted June 4, 2005 We were actually turned down for a secured loan from a credit union because our scores were not high enough! One that we have belonged to for years for our savings. Then, we called our big bank and all they asked us is when we wanted to close the loan. Link to comment Share on other sites More sharing options...
aints68 Posted June 9, 2005 Report Share Posted June 9, 2005 That's kind of odd that they even checked your credit. I've done secured loans at 2 different credit unions over the past several months and they didn't even pull a report. Link to comment Share on other sites More sharing options...
Mannerheim Posted June 10, 2005 Author Report Share Posted June 10, 2005 Hey,We're your two loans listed on your credit file as secured? Link to comment Share on other sites More sharing options...
jq26 Posted June 10, 2005 Report Share Posted June 10, 2005 my secured loan through a credit union showed up as "secured" with EXP and EQ. No reference to it with TransUnion.Also, both a bank and my credit union checked my credit for a 100% secured loan. Link to comment Share on other sites More sharing options...
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