debtmamma Posted September 21, 2007 Report Share Posted September 21, 2007 Is it better to have1K over 1 year2K over 2 years5K over 2 or 3 yearsDoes it matter?These loans are high at 10% that is kind of high but I want an installment tradeline. thank you Link to comment Share on other sites More sharing options...
debtmamma Posted September 21, 2007 Author Report Share Posted September 21, 2007 sorry that should be ? not $ LOL Link to comment Share on other sites More sharing options...
willingtocope Posted September 21, 2007 Report Share Posted September 21, 2007 Not sure what you hope to accomplish. Having $0 over no years is best. If you need to borrow money for something, do it...but if you're just borrowing money to jack up your FICO scores, ehhh, not so much. If you borrow $1000 at what 10%, put it in a savings account at 1%, and make the payments out of the savings account so that you pay it off in a year, that's costs you probably $150 over the year. (Borrowing interest is compounded daily...savings interest is compounded monthly.)Borrow more, it costs you more.If you're looking to get a mortgage...having NO installment loans is best.If you're looking to get a credit card...don't. Link to comment Share on other sites More sharing options...
debtmamma Posted September 22, 2007 Author Report Share Posted September 22, 2007 I'm just looking to get some installment history on my account. It's not actually $ I will be getting. They lock the $ in my savings account and whatever I pay, I can get back - interest. I'm basically just circling a payment and paying the bank interest for the tradeline. Link to comment Share on other sites More sharing options...
willingtocope Posted September 22, 2007 Report Share Posted September 22, 2007 Not sure I follow. This is a program offered by a bank? They open a savings account in your name, but you can't touch the money? Who makes the payments on the loan? Link to comment Share on other sites More sharing options...
debtmamma Posted September 22, 2007 Author Report Share Posted September 22, 2007 It's a credit builder loan. It's not reported as secured though because the $ is in the bank.I borrow 1K on the loan lets say for 10 months. Total payments are 1,100.Jan I pay $110I can withdraw $100Feb I pay $110I can withdraw $100If you don' withdraw anything at the end you basically get a lump sum for the loan amount. I plan on withdrawing though and just adding the inerest to it each month.So I'm wondering, would it be better to do 1K for one year, 2K for 2 years, 3K for 3 years? I wonder if a 3 year loan would be good because that would be a longer Hx of isntallments. And it would be the same loan, longer history, less hit on average age of accounts vs doing 2 or 3 1,000K loans. It actually is a great idea I think because people get a history and there is no risk to the lender. Link to comment Share on other sites More sharing options...
willingtocope Posted September 22, 2007 Report Share Posted September 22, 2007 It's a credit builder loan. It's not reported as secured though because the $ is in the bank.I borrow 1K on the loan lets say for 10 months. Total payments are 1,100.Jan I pay $110I can withdraw $100Feb I pay $110I can withdraw $100Hmmm...sounds to me like just another way that creditors have found to play the "my god, you've got to have good credit scores!" game. Using your plan there...if you took that $10 extra and put it in a credit union savings account, at the end of 10 months you have $105 dollars of your own. And the "money in a savings account" positive is a bigger positive than the "borrowed money and paid it back" positive.Although truthfully, it depends on what your credit goals are. If you want a house, put the extra money in the bank. If you want to run up credit cards, start with one of the secured CCs. Link to comment Share on other sites More sharing options...
debtmamma Posted September 22, 2007 Author Report Share Posted September 22, 2007 Hmmm...sounds to me like just another way that creditors have found to play the "my god, you've got to have good credit scores!" game.Isn't that the truth??? And we get to pay them to act like that. I agree with you it sees like a waste of $. I don't want to run up cc, I just got approved for some. The whole idea of cc bothers me. My goal is just to get a payment/history installment tradeline on my credit report.My car was recently repo'ed from a title/pawn loan (not reporting on CRA one those loan shark places). CU looked up the cars value they said 5K. I wanted to borrow 1100 to buy it back from the title loan place (I have $500). My EQ FICO (the one they pulled) was 770 but they wouldn't give me a collateral loan because she said I had no experience with debt. I agree with you, it does seem like money down the drain but it's impossible for me to get an installment tradeline without it. My other credit union where I have been receivng direct deposits for years wouldn't even loan me $300 unsecured with a 730 FICO because they said my income was too low. I even appealed it to the board of directors. I have all my direct deposits go into savings there and when I need to pay something I get money orders or transfer it to my checking.My goal is just to get an installment tradeline. I would like to buy a house eventually but even for a government loan I have to earn more $ to be elgible. Link to comment Share on other sites More sharing options...
razr Posted September 22, 2007 Report Share Posted September 22, 2007 Seems like a fine idea to me. The loan will pay off in the future in terms of you having better credit. You'll easily get your money back in the form of lower rates. I'd do it for just one year, then reassess.-rPS: Post 1000! Link to comment Share on other sites More sharing options...
debtmamma Posted September 22, 2007 Author Report Share Posted September 22, 2007 I just got back. I was given misinformation at first about how long and the amounts. LOL All the worry over what? The highest/longest they do is 1K for 12 months. OK I did it, 1K for 12 months. It will end up costing me $135 for this tradeline. $100 in interest and $35 to join that credit union. Link to comment Share on other sites More sharing options...
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