jbusta Posted November 27, 2007 Report Share Posted November 27, 2007 If I just got a $500 personal loan from my credit union, today. How soon should I apply for a second loan of maybe $500 again or $1000? The loan is a 6month loan. Thanks for any help Link to comment Share on other sites More sharing options...
jq26 Posted November 27, 2007 Report Share Posted November 27, 2007 What are you trying to accomplish? Is your FICO being held back due to a lack of installment loans? And why not use secured installment loans rather than unsecured personal loans? You can actually MAKE money on them and they build tradelines. Plus, it helps you save. Right now, your personal loan probably has a +10% APR. Link to comment Share on other sites More sharing options...
jq26 Posted November 27, 2007 Report Share Posted November 27, 2007 FYI- I used secured loans because I had multiple credit card tradelines (revolving credit) but no installment loans and my FICO score analysis kept citing this as a reason for scores in the 600s. The first secured loan was $500, then $1000 (6 months later), then $10,000 (about 6 months after that). All loans are paid in full now and the money went to buy a house earlier this year...but the installment loans help boost my FICO score- especially during the crucial period of mortgage application back in March (see signature). Link to comment Share on other sites More sharing options...
jbusta Posted November 27, 2007 Author Report Share Posted November 27, 2007 Hi, thanks for your input.Basically, I have almost no credit history. Last time I checked, my experian was around 580. All I am trying to do is begin building credit. Is a personal loan going to help me do that at all? I thought unsecured loans did more for you than secured loans? I have no credit tradelines at all right now, other than this personal loan for $500 that i just received. And yes, my apr is at 11.9%. What should my next steps be from here, if you don't mind filling me in? Thank you Link to comment Share on other sites More sharing options...
jq26 Posted November 27, 2007 Report Share Posted November 27, 2007 Since FICO is based on a proprietary algorithm that is highly guarded, all I can tell you is what I read, hear, and have experienced. I do not think it matters for these type of loans whether they are secured or not. The only difference is that it states "secured" in the notation and the installment loan is all the same. If I am you, I stick with my $500 unsecured loan, pay half this month, pay another half next month, and then milk the rest of the required payments until it is paid off. I'd open a secured loan for more money (this gives you incentive to save) when this one is closed at your new credit union which you will be joining shortly.At this credit union, open a credit card. You need at least one revolving account. Use it each month for something you need any way (gas, utility bill, etc.) and PAY IN FULL. Try for an unsecured card if you can..but get a secured card if need be. Again, make sure they report to all three CRAs. Between your installment account and your credit card, you'll build history. You'll be penalized for your short history, but you can't fight that. The great credit history you are building will eventually outweigh the short history and your scores will rise every month. If you anticipate a big purchase within a year or two (house or car), then I'd get a third tradeline. Another credit card preferably. I have heard that loan officers look for three recent positive tradelines (plus it will further boost your score).Good luck. Keep in mind that you are in better shape than most on this site in that you are starting from scratch the right way instead of being smart only after nuking your credit the first time. 1 Link to comment Share on other sites More sharing options...
jbusta Posted November 28, 2007 Author Report Share Posted November 28, 2007 PERFECT!!!Thanks a lot for all of your suggestions jq26. I REALLY REALLY APPRECIATE IT.I am a member of the credit uninon OCTFCU, orange county teachers fcu. I just got my $500 loan with them the other day, and today I just got approved for a VISA Gold Card with a 10.9% APR with a $500 CL as well.I also took your advice and applied for 3rd TL. An unsecured Orchard Platinum Mastercard. To my surprise, I also got approved on that one for a $500 CL. The reason I applied for this one, is because I've read that it is one of the best for a starter/rebuilder of credit, and that is what I am doing right now.So to sum it up:OCTFCU Personal Loan-$500: Paying $250 1st month, $125 2nd month, $31.25+/- remaining 4 months.OCTFCU Visa Gold-$500 CL: Using it to pay Cell Phone Bill and Car Insurance (Total = $142)ORCHARD Platinum Mastercard-$500 CL: Using it to pay Gym Fees and GAS (Total = $140)I know my Credit Limits are low, but it's all I am qualified for right now, according to both companies. Does this sound like a good plan for now? Link to comment Share on other sites More sharing options...
Krash Posted November 29, 2007 Report Share Posted November 29, 2007 i would say so, i am going to go to the federal credit union and get me a secured loan for 500, then take out another loan with them till i get 1000, secured total after paying each off that should help my score.. good luck Link to comment Share on other sites More sharing options...
jq26 Posted November 29, 2007 Report Share Posted November 29, 2007 OCTFCU Personal Loan-$500: Paying $250 1st month, $125 2nd month, $31.25+/- remaining 4 months.OCTFCU Visa Gold-$500 CL: Using it to pay Cell Phone Bill and Car Insurance (Total = $142)ORCHARD Platinum Mastercard-$500 CL: Using it to pay Gym Fees and GAS (Total = $140)Does this sound like a good plan for now?Sounds like you're on your way to good credit scores. Sit back, relax, and let your FICO score build over time. Link to comment Share on other sites More sharing options...
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