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Alliant CU Installment Loan Hack CliffsNotes®

The last post in this topic was posted 1035 days ago. 

 

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There has been several threads on CB about the installment loan hack to gain points on the FICO 08 scale (commonly used for credit cards). This guide is intended to give an easy, step-by-step framework to the application/funding/payoff process.

 

It has been observed that for those without an active installment loan, adding an installment loan and immediately paying it off to less than 9% remaining balance can give a FICO 08 increase. If you already have active installment loan(s) this will not work for you.

 

There have been reports of people gaining 10-40 points, and these are people that had already implemented the $2 trick, so it is not an either/or thing. AND HENCE THE REASON THAT THERE IS NO NEED FOR $2 TRICK DISCUSSION IN THIS THREAD.

 

One nice thing to note is there is no hard credit pull for membership, and no hard credit pull for the Share Secure loan. Obviously, this could change or you could be really really unlucky in which case I apologize in advance. This loan also reports to all three CRA's.

 

1. Go to AlliantCreditUnion.org and join as a member. For most people this will entail having to join the Foster Care to Success organization and making a one time contribution of $10. The link to the FCS application page will be right on the Alliant website. Alliant also matches the $10 donation. The link opens a new browser tab, and after you have made the donation, you can go back to the original tab and continue the membership application process. After completing the membership application, they will get in touch with you via email or something

 

2. Alliant needed to verify my identity, so I had to fax two forms of ID, plus a utility bill for proof of address. This will obviously be a YMMV situation.

 

3. Several days later, I received my Alliant welcome packet in the mail. This had my membership number. From there, you will want to set up your online access, and schedule an ACH pull from your existing checking account. You will need to send Alliant between $500-$1000 PLUS an extra $10 or so to have a maintained balance in the savings account. You could also mail a check to Alliant or stop by a branch and deposit checks, money orders, pennies or whatever.. I happened to find a branch that I was going to be driving by and walked in and deposited a cashiers check.

 

4. If you do an ACH pull, it is going to take 3-4 days for the funds to transfer AND to be available to you. I have no idea how long it will take if you mail funds. I walked into a branch and gave them a cashiers check, which they immediately cleared and made available.

 

5. Apply for a Share Secured Loan. They have a 48 month max short term loan, and a 60 month long term loan. The long term loan is probably the way to go, although the second you get another installment loan this whole thing becomes meaningless. So if you think you are going to purchase a car or house next year, do a shorter term loan. If you do a short term loan, the APR is 3%. If you do the long term loan, the APR is 4%. The interest is trivial because you are going to pay it mostly off immediately. Make the loan amount for between $500 and $1000. I did $1000 because I had heard they were complaining about $500 loans for the 60 month term. Tying up a couple bucks was less important to me than missing LA afternoon traffic. The hack works regardless of the $500 or $1000 initial amount.

 

6. If you have applied online, which most people will be doing, you will receive a call from a loan officer in a day or so to finalize the loan. After this call, they will send you a secure document link for you to sign the docs. I obviously just had them handed to me and signed them. They will automatically set you up on an autopay from your savings account. This can be changed to your checking, or an outside pull etc but I am not going to get in to all of that. Have the loan funds put into your Share account.

 

7. After the loan is finalized, it will show up on your account page. You can then go to the transfer funds tab and pay the loan down. I paid a $1000 loan down to $80. So the first time it reports to the CRA's it will only have 8% of the original value showing. My next payment is showing due in Dec-2020. If you do a $500 loan, you'll want to pay it down to $44.

 

8. You need to cancel that autopay. Apparently it is impossible to cancel before the first autopay gets taken out. While it is showing that the next payment is due Dec-2020, I am led to believe that there will be a payment made in Oct-2016. After this first payment, you can then cancel the autopay.

 

9. I am going to set up an auto transfer from BofA to Alliant to pay this loan monthly. Something like $1.05. That will keep current activity in the Alliant system and such. I might even pay it more, like $1.25, since I never expect to keep this loan open that long. As I said, the second you add an installment loan its worthless and better to pay it off and close it out just to maintain financial tidiness.

 

 

Note: As I said there have been threads here and on MyFico about this hack. I did not originate it. I am merely posting everything here to make it easy to access for people.

Edited by Konrad2012

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Bravo. I am seriously considering doing this within the next month or two. I do not have any open installment loans and my scores could really use the boost.

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Bravo. I am seriously considering doing this within the next month or two. I do not have any open installment loans and my scores could really use the boost.

 

If you have the $510 free you should do it immediately. As soon as you pay back the $455, it will free up your security deposit of that amount. So you'll end up with $45 tied up in the loan, and $10 extra float.

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Awesome write up!!! :good:

 

Even I understood your steps.

 

How long does it usually take Alliant to start reporting?

 

I may even join my first CU for this. :yahoo:

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Does the NFCU CLOC count as an installment loan as well? So that would invalidate this method if you had the CLOC? If that's the case would it make more sense to jump through the NFCU hoops to get the CLOC and then put 5% on it, and leave it with that 5-8% balance?

 

I don't know how it reports, just figured this was the right place to ask. And for most a membership with NFCU should be the first thing they do, especially if they are rebuilding.

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Does the NFCU CLOC count as an installment loan as well? So that would invalidate this method if you had the CLOC? If that's the case would it make more sense to jump through the NFCU hoops to get the CLOC and then put 5% on it, and leave it with that 5-8% balance?

 

I don't know how it reports, just figured this was the right place to ask. And for most a membership with NFCU should be the first thing they do, especially if they are rebuilding.

NFCU CLOC is revolving not installment.

 

You could probably get the same bennies from an NFCU installment loan except you might get an HP for it.

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Does the NFCU CLOC count as an installment loan as well? So that would invalidate this method if you had the CLOC? If that's the case would it make more sense to jump through the NFCU hoops to get the CLOC and then put 5% on it, and leave it with that 5-8% balance?

 

I don't know how it reports, just figured this was the right place to ask. And for most a membership with NFCU should be the first thing they do, especially if they are rebuilding.

NFCU CLOC is revolving not installment.

 

You could probably get the same bennies from an NFCU installment loan except you might get an HP for it.

 

Ahhh that's actually super sweet! One last question would an installment loan count(Alliant obviously not NFCU CLOC) against the 5/24 of Chase?

 

Really good guide yet again Konrad!

Edited by Atl-Marcos

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Does the NFCU CLOC count as an installment loan as well? So that would invalidate this method if you had the CLOC? If that's the case would it make more sense to jump through the NFCU hoops to get the CLOC and then put 5% on it, and leave it with that 5-8% balance?

 

I don't know how it reports, just figured this was the right place to ask. And for most a membership with NFCU should be the first thing they do, especially if they are rebuilding.

NFCU CLOC is revolving not installment.

 

You could probably get the same bennies from an NFCU installment loan except you might get an HP for it.

Ahhh that's actually super sweet! One last question would an installment loan count(Alliant obviously not NFCU CLOC) against the 5/24 of Chase?

 

Really good guide yet again Konrad!

Frim what I've read installment loan would not count against 5/24. Best way around 5/24 seems to be in branch pre approvals.

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How much of bump does this really provide?

 

There is a large thread on myfico with lots of results. Depending on what score card you are on FICO 8 and FICO 9 scores tend to get an increase of between 10 points and 40 points. Clean reports tend to get the biggest bump with 35 points not uncommon.

 

How long does it usually take Alliant to start reporting?

They report loans at the end of the month. Some posters on myfico have reported that the loan did not report for them the first month but lots of others have reported that it did for them. I think it depends on if you get everything done in the first two or three weeks of the month.

Edited by Tyra

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Does the NFCU CLOC count as an installment loan as well? So that would invalidate this method if you had the CLOC? If that's the case would it make more sense to jump through the NFCU hoops to get the CLOC and then put 5% on it, and leave it with that 5-8% balance?

 

I don't know how it reports, just figured this was the right place to ask. And for most a membership with NFCU should be the first thing they do, especially if they are rebuilding.

NFCU CLOC is revolving not installment.

 

You could probably get the same bennies from an NFCU installment loan except you might get an HP for it.

 

NFCU Shares Secured Loan terms go up to 180 months/15yrs at 3% int or 60 months/5yrs at 2% int

Edited by credithunting

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NFCU Shares Secured Loan terms go up to 180 months/15yrs at 3% int or 60 months/5yrs at 2% int

The advantage to Alliant is that there is no hard INQ involved, and you can prepay which pushes the payment date out 4 1/2 years.

 

Also when people were researching this, the NLSD method of eligibility for NFCU wasn't as well known, so I don't think NFCU has had the datapoints like Alliant.

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NFCU also pushes the payment date out on loans, but yes, the HP makes it less attractive.

 

It would be great to collect datapoints here. There's no need to link to MF. The OP gave credit where it was due, but there isn't a need to link elsewhere.

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Thank you for this information. Everything is going as you said. They said they will contact me in two days. Something about needing a manual review. Probably because of a hyphenated last name.

 

 

Sent from my iPhone using Tapatalk

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NFCU Shares Secured Loan terms go up to 180 months/15yrs at 3% int or 60 months/5yrs at 2% int

The advantage to Alliant is that there is no hard INQ involved, and you can prepay which pushes the payment date out 4 1/2 years.

 

Also when people were researching this, the NLSD method of eligibility for NFCU wasn't as well known, so I don't think NFCU has had the datapoints like Alliant.

 

 

Thanks for this, Konrad. I've had share loans in the past (more than 10 years ago), and I recall that the payments were fixed when the loan was written. Has that changed in general, allowing you to pay the proportionately smaller payment? Thanks!

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There is an Alliant right down the street from me. Can you accomplish all of this in one day with a visit to the Credit Union?

 

1. Become a member

2. Open savings

3. Deposit into savings

4. Get the shares loan

 

I think I'll become a member by joining the Foster program, and then try to come in and take care of 2-4. What do you think?

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NFCU Shares Secured Loan terms go up to 180 months/15yrs at 3% int or 60 months/5yrs at 2% int

The advantage to Alliant is that there is no hard INQ involved, and you can prepay which pushes the payment date out 4 1/2 years.

 

Also when people were researching this, the NLSD method of eligibility for NFCU wasn't as well known, so I don't think NFCU has had the datapoints like Alliant.

 

 

Thanks for this, Konrad. I've had share loans in the past (more than 10 years ago), and I recall that the payments were fixed when the loan was written. Has that changed in general, allowing you to pay the proportionately smaller payment? Thanks!

 

This bank in particular doesn't fix the payments. That's my understanding from reading the other boards and this board. It doesn't fix your payments.

Edited by Atl-Marcos

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There is an Alliant right down the street from me. Can you accomplish all of this in one day with a visit to the Credit Union?

 

1. Become a member

2. Open savings

3. Deposit into savings

4. Get the shares loan

 

I think I'll become a member by joining the Foster program, and then try to come in and take care of 2-4. What do you think?

I did my membership portion online, so I cannot give you a legitimate answer to that question.

 

Once the membership is established, #'s 2-4 can be accomplished in-branch in 15 minutes (assuming there's no line of course). Just take in a cashiers check payable to yourself for $510 or $1010.

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Does this work if you have an active mortgage account? What about closed SL? Both TU and EQ list "no recent activity on a non-mortgage installment loan" under negatives on MF with my existing mortgage.

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Does this work if you have an active mortgage account? What about closed SL? Both TU and EQ list "no recent activity on a non-mortgage installment loan" under negatives on MF with my existing mortgage.

I was curious about the possible differentiation between Mortgage and other installment types of loans before reading your comment. Now I am even more curious after reading your above statement "Both TU and EQ list "no recent activity on a non-mortgage installment loan" under negatives on MF with my existing mortgage."

Edited by DigDeep

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Does this work if you have an active mortgage account? What about closed SL? Both TU and EQ list "no recent activity on a non-mortgage installment loan" under negatives on MF with my existing mortgage.

I was curious about the possible differentiation between Mortgage and other installment types of loans before reading your comment. Now I am even more curious after reading your above statement "Both TU and EQ list "no recent activity on a non-mortgage installment loan" under negatives on MF with my existing mortgage."

 

From looking at the data posted in the myfico thread, for this calculation all types of loans appear to be lumped together as if they were one big loan. Aggregate loan (mortgage, car, student, personal, any type of loan) utilization appears to be what triggers the FICO point gain or loss that posters are reporting.

Edited by Tyra

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