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FullofHope

Will score drop adding a second or third installment loan?

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Hi everyone,



We are in the midst of a rebuild and our discharge was 5 months ago. We've been denied most cards (except for me I have a cap1, hubs is blacklisted) but our scores are all in the 640-650s range. Hubs has an alliant shared secure loan and I have a ginormous student loan. Secured cards seem like the only way.



We were thinking of getting a shares secured loan from NFCU and using that to fund our secured cards. We know there are no benefits beyond having one installment loan, we just want to make sure we won't experience a score drop. Besides bankruptcy as a reason we keep getting the "TOO FEW ACCTS" denial.



We are also thinking of getting a car loan this summer. Our clunkers are clunking out.



Thanks!


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I would not recommend borrowing money in order to open a secured credit card.

 

save up money to open a secured credit card.

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I would not recommend borrowing money in order to open a secured credit card.

 

save up money to open a secured credit card.

 

We do have the money for it. This would be a shared secure loan, secured by the money in our savings account. We figured this would be a good way to get another account reporting. Just like with the Alliant we'd pay the this "loan" down to about 6% shortly.

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there is little to be gained, if anything, with another installment loan especially given the impact it will have on your AAOA.

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The Shared Secured Loan "trick" is only if you have no other installment loans.

 

If you have student loans I do not think you would see any benefit whatsoever.

 

Do not chase reason codes from CCT trying to get your score up.

 

If you are rebuilding I would strongly recommend reading the thread below and following the advice within.

 

 

https://creditboards.com/forums/index.php?showtopic=572446&page=3&hl=%2Bchase+%2Bstrategy

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I fully understand and I agree that there are no added benefits of having more than one installment loan (score wise) for the current model but I wanted to know if there were the consequences, if any. Perhaps I wasn't clear in my post but we're not trying to do the installment loan trick here. We just don't want to undo any of the work that we have done thus far.

 

I didn't know that CCT provided reasoning codes, I was going based on the conversation I had with a PenFed LO recently.

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there is little to be gained, if anything, with another installment loan especially given the impact it will have on your AAOA.

 

 

Ahhh, there ever-present AAOA. Thanks Heg!

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I fully understand and I agree that there are no added benefits of having more than one installment loan (score wise) for the current model but I wanted to know if there were the consequences, if any. Perhaps I wasn't clear in my post but we're not trying to do the installment loan trick here. We just don't want to undo any of the work that we have done thus far.

 

I didn't know that CCT provided reasoning codes, I was going based on the conversation I had with a PenFed LO recently.

 

Yes, it will lower your AAOA.

 

 

If you are wanting to add more than one account, then add an additional secured card that will graduate.

 

Adding an installment loan would not help long-term, when rebuilding it's best to get accounts that you can keep and grow in the long-term.

 

 

The Master Secured Credit Cards Thread

Edited by Agrajag

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The Shared Secured Loan "trick" is only if you have no other installment loans.

 

If you have student loans I do not think you would see any benefit whatsoever.

 

Do not chase reason codes from CCT trying to get your score up.

 

If you are rebuilding I would strongly recommend reading the thread below and following the advice within.

 

 

https://creditboards.com/forums/index.php?showtopic=572446&page=3&hl=%2Bchase+%2Bstrategy

 

Just to clarify for everyone, an auto loan counts as an installment loan for this purpose? That is, a secured loan is counted the same as an unsecured loan for FICO 8?

 

Sorry if this sounds like a newb question, but others might benefit from this info.

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The Shared Secured Loan "trick" is only if you have no other installment loans.

 

If you have student loans I do not think you would see any benefit whatsoever.

 

Do not chase reason codes from CCT trying to get your score up.

 

If you are rebuilding I would strongly recommend reading the thread below and following the advice within.

 

 

https://creditboards.com/forums/index.php?showtopic=572446&page=3&hl=%2Bchase+%2Bstrategy

 

Just to clarify for everyone, an auto loan counts as an installment loan for this purpose? That is, a secured loan is counted the same as an unsecured loan for FICO 8?

 

Sorry if this sounds like a newb question, but others might benefit from this info.

 

As I understand it, that is correct.

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I fully understand and I agree that there are no added benefits of having more than one installment loan (score wise) for the current model but I wanted to know if there were the consequences, if any. Perhaps I wasn't clear in my post but we're not trying to do the installment loan trick here. We just don't want to undo any of the work that we have done thus far.

 

I didn't know that CCT provided reasoning codes, I was going based on the conversation I had with a PenFed LO recently.

 

Yes, it will lower your AAOA.

 

 

If you are wanting to add more than one account, then add an additional secured card that will graduate.

 

Adding an installment loan would not help long-term, when rebuilding it's best to get accounts that you can keep and grow in the long-term.

 

 

The Master Secured Credit Cards Thread

 

Thanks so much! Just finished reading the NFCU/Chase thread you recommended.

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The Shared Secured Loan "trick" is only if you have no other installment loans.

 

If you have student loans I do not think you would see any benefit whatsoever.

 

Do not chase reason codes from CCT trying to get your score up.

 

If you are rebuilding I would strongly recommend reading the thread below and following the advice within.

 

 

https://creditboards.com/forums/index.php?showtopic=572446&page=3&hl=%2Bchase+%2Bstrategy

 

Just to clarify for everyone, an auto loan counts as an installment loan for this purpose? That is, a secured loan is counted the same as an unsecured loan for FICO 8?

 

Sorry if this sounds like a newb question, but others might benefit from this info.

 

As I understand it, that is correct.

 

 

That's what I figured...thanks!

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I wouldn't do it. There is nothing to be gained and your AAOA will take a hit.

 

Focus on revolving credit and check out the secured cards list posted above.

Edited by mendelssohn

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