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Excited to be able to get into NFCU today! Woohoo!

 

Rebuilding my credit, so I'm interested in the Shares Secured Loan (their credit builder program) which I understand is hackable. 

 

The rep told me if I make a payment that leaves me with half the loan remaining or anything of the sort, it will skip months of payments which will then NOT report to the CRA's for that duration of time which defeats the purpose of getting the loan to begin with. Does anyone know if this is true?

 

I'm asking because I don't want to tie up my money in the loan but need to keep it for a 2 year term and want to obtain the reporting to the CRA's. 

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Why not do the secured card instead of the loan? Are you addressing credit mix at the same time?


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9 minutes ago, MessyCredit1 said:

Why not do the secured card instead of the loan? Are you addressing credit mix at the same time?


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"mix of credit" (installment loans, revolving credit, etc) matters in FICO scoring and some people open an installment loan hoping to pick up a few points. When someone is rebuilding, however, it is not that helpful as it is for people with clean reports. Also, you have have FICO scores over 800 without an open installment loan.

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"mix of credit" (installment loans, revolving credit, etc) matters in FICO scoring and some people open an installment loan hoping to pick up a few points. When someone is rebuilding, however, it is not that helpful as it is for people with clean reports. Also, you have have FICO scores over 800 without an open installment loan.

Thank you for this clarification. I’ve been lurking around looking for rebuilding strategies/dos and don’ts etc. but it’s been hard to find info/posts for beginners.

Do you have any favorite posts or threads that you can recommend? I want to avoid wasting time on accounts or programs that don’t help.

As an example, I just got a NFCU account but not sure if I should apply for any of their stuff yet.

Can’t find good guidance of when to implement certain steps or programs.

I also couldn’t open the earlier link that you posted to see if I could understand why OP was utilizing the loan versus the card and figure out if any of it would apply to my situation


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15 minutes ago, MessyCredit1 said:


Thank you for this clarification. I’ve been lurking around looking for rebuilding strategies/dos and don’ts etc. but it’s been hard to find info/posts for beginners.

Do you have any favorite posts or threads that you can recommend? I want to avoid wasting time on accounts or programs that don’t help.

As an example, I just got a NFCU account but not sure if I should apply for any of their stuff yet.

Can’t find good guidance of when to implement certain steps or programs.

I also couldn’t open the earlier link that you posted to see if I could understand why OP was utilizing the loan versus the card and figure out if any of it would apply to my situation


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Everyone has a different starting point so I recommend you start a new thread to deal with anything you are trying to accomplish. Any recommendation depends on a lot of specifics to your situation.

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1 hour ago, hegemony said:

good job getting into NFCU but I don't see any reason the answers in your previous thread don't remain in effect:

 

Thanks @hegemony! I read "Konrad's" post but I don't recall it addressing my particular question I posted here. I will read it again though to see.

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5 hours ago, maverick9 said:

Thanks @hegemony! I read "Konrad's" post but I don't recall it addressing my particular question I posted here. I will read it again though to see.

The advice in your previous thread Hege was referring to is to focus on your revolving profile for more impact than the installment loan hack you seem to be fixated on. 

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Here is some personal advice from an old credit analyst.   if you have a thin or young credit file and want to concentrate on an installment account you need the following:

 

1. an installment account with a high credit of $5,000.00.

2. the account needs a reported credit history of 36 months for a maximum FICO®score.

3. Don't have any delinquent payments on file during the 36 months.

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Posted (edited)
11 hours ago, shifter said:

The advice in your previous thread Hege was referring to is to focus on your revolving profile for more impact than the installment loan hack you seem to be fixated on. 

You are correct but I don't know if you recall @shifter, I NEED an installment line of credit that is aged for 1 year so I can get a mortgage. Upon speaking to 2 very seasoned mortgage bankers who are personal friends of mine will surely do the loan for me. I am self employed and they both specialize in self employed products. I won't get pre approved/approved under the common W2 mortgage guidelines. I myself also did mortgage for 7 years so I'm aware of the differences between W2 vs self employed. I need this installment TL

 

1 hour ago, MarvBear said:

Here is some personal advice from an old credit analyst.   if you have a thin or young credit file and want to concentrate on an installment account you need the following:

 

1. an installment account with a high credit of $5,000.00.

2. the account needs a reported credit history of 36 months for a maximum FICO®score.

3. Don't have any delinquent payments on file during the 36 months.

@MarvBear I'm honored you replied on my post. Thank you so much for doing so and providing us a great platform for all things credit. I have referred about 47 people to CB already (not kidding). I'm a fan and thanks again for your input. It is noted and I'm paying heed to it. 

Edited by maverick9

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I need to be clear for everyone who reads this thread because I realized I have an incomplete sentence on my post, according to 2 very seasoned mortgage bankers who are personal friends of mine, I NEED an installment loan AND one that is aged for 1 year. Being self employed this is what is required. This meets the CURRENT loan underwriting guidelines.

 

Everything is subject to change and yes, they can do exceptions. I like preparing for the worst and hoping for the best though. Just a principal I now live by. 

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6 minutes ago, maverick9 said:

I need to be clear for everyone who reads this thread because I realized I have an incomplete sentence on my post, according to 2 very seasoned mortgage bankers who are personal friends of mine, I NEED an installment loan AND one that is aged for 1 year. Being self employed this is what is required. This meets the CURRENT loan underwriting guidelines.

 

Everything is subject to change and yes, they can do exceptions. I like preparing for the worst and hoping for the best though. Just a principal I now live by. 

I have never heard of a requirement to have an installment loan to qualify for mortgage, whether self employed or W2. Frankly it makes no sense, prima facie, that having a worse DTI due to having payments on a superfluous installment loan "helps" someone get qualified for a mortgage. Moreover, having young tradelines (age <25 months) can hurt your FICO scores. Do you have a copy of their written qualification requirements? I'd love to see it.

 

I'm not trying to argue but I recommend finding a new mortgage broker to work with... or at least ask the two you've talked to WHY you need it; that is, what is the logic for asking you to take on new debt, a new tradeline, and wasting your time.

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32 minutes ago, maverick9 said:

I need to be clear for everyone who reads this thread because I realized I have an incomplete sentence on my post, according to 2 very seasoned mortgage bankers who are personal friends of mine, I NEED an installment loan AND one that is aged for 1 year. Being self employed this is what is required. This meets the CURRENT loan underwriting guidelines.

 

Everything is subject to change and yes, they can do exceptions. I like preparing for the worst and hoping for the best though. Just a principal I now live by. 

 

I can only assume by reading your post that the mortgage bankers you are speaking with are viewing you as in need of a Non-QM/hard money lender?   If that is the case the amount of the minimum monthly payment on said installment loan that they want to see history on is just as important as having the loan itself.  Non-QM lenders want to see a track record of you being able to make comparable sized payments - many would prefer current landlord print-outs (if you rent) showing your pay history/schedule than a non-comparable installment loan for the sake of having an installment loan.

 

With that said, right now during this pandemic Non-QM lenders have dried up and are essentially non-existent as of today - but given that you are aiming for such a loan a year from now, I would hope and imagine that market we re-emerge by then.  

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Just another bit of advice I have gleaned over the years in my dealings.

 

Quote

Mortgage brokers work on commission, which are paid by you, by the lender, or by both you and the lender. If you work with a mortgage broker, the industry norm is for them to charge you an origination fee equal to 1 percent of the loan amount.

That's kind of like how I used to get paid.    And how many people trust f&I managers to represent their best interests or to do anything other than to make their own job easier.

 

I think that honestly made the point for you without saying anything more.

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9 minutes ago, MarvBear said:

Just another bit of advice I have gleaned over the years in my dealings.

 

That's kind of like how I used to get paid.    And how many people trust f&I managers to represent their best interests or to do anything other than to make their own job easier.

 

I think that honestly made the point for you without saying anything more.

Yep. Thanks for sharing and I have taken that into account. They are close long term friends of mine and would be surprised if they tried ill advising me to make money but yes, I understand when money is involved all things are possible. 

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Ok. Since I needed clarification and wanted to be sure, I phoned my mortgage friend. I was wrong and misunderstood. SORRY Y'ALL! 

 

My mortgage friend told me that I do NOT need the installment loan. I showed her this thread and she said @hegemony was correct. Thanks @hegemony and everyone else who contributed.

She told me just clean up the derogs AND it's best to have have 5 TL's. It doesn't matter if they are revolving or installment. She just wants to see 5 TL's. 

 

I am carving out a game plan for cleaning up my derogs. So that is in the works.

 

My questions now is do I get a 5th TL as I have 4 now? If so, I presume getting a revolving CC is the way to go, right since you all are advising against the installment loan?

 

I'm thinking the only reason to get the installment loan is for credit mix and it's hackable, right but please guys and gals, let me know. 

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Posted (edited)
On 5/19/2020 at 7:37 PM, maverick9 said:

Excited to be able to get into NFCU today! Woohoo!

 

Rebuilding my credit, so I'm interested in the Shares Secured Loan (their credit builder program) which I understand is hackable. 

 

The rep told me if I make a payment that leaves me with half the loan remaining or anything of the sort, it will skip months of payments which will then NOT report to the CRA's for that duration of time which defeats the purpose of getting the loan to begin with. Does anyone know if this is true?

 

I'm asking because I don't want to tie up my money in the loan but need to keep it for a 2 year term and want to obtain the reporting to the CRA's. 

Their secured credit card and SSL (share secured loan) combo is an excellent score boost.  You can immediately pay the loan down to less that 9% and the next payment is due in years... (depending on amount and term).  It reports every month!

 

You get 92% of the money right back...  it is a beautiful thing.  Their Auto loans work the same way.  Get a 100% loan, pay it down and the next payment is due years down the road.

Edited by pacemaker67

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8 hours ago, pacemaker67 said:

Their secured credit card and SSL (share secured loan) combo is an excellent score boost.  You can immediately pay the loan down to less that 9% and the next payment is due in years... (depending on amount and term).  It reports every month!

 

You get 92% of the money right back...  it is a beautiful thing.  Their Auto loans work the same way.  Get a 100% loan, pay it down and the next payment is due years down the road.

@pacemaker67 This is ONE of the several reasons why I wanted the share secured loan because I heard it IS an excellent score booster and it completes my 5th tradeline! 

 

What I'm NOT clear on is if I pay it immediately is it going to report every month? Because I thought you WANT it to report every month so you can show perfect payment history. 

 

Are you saying even if you pay it immediately it will STILL report monthly with you having to make an actual payment? 

 

Have you done it?

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I've never done this, never been tempted.   But the original poster just posted a remarkably interesting question.  Data furnishers are required to report in a timely fashion.  If you prepay the bulk of the loan and they still report each month, will the monthly legend reflect "ND"?

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1 hour ago, MarvBear said:

I've never done this, never been tempted.   But the original poster just posted a remarkably interesting question.  Data furnishers are required to report in a timely fashion.  If you prepay the bulk of the loan and they still report each month, will the monthly legend reflect "ND"?

Perhaps the OP will be kind enough to be the guinea pig on this experiment. 

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I'm a licensed mortgage originator and can confirm Fannie Mae nor HUD require an installment trade line. General underwriting requirements are that when a tri-merge credit report is pulled, there is enough information within the report to generate a score. Most lenders have an underwriting "overlay" that there are a minimum of three open trade lines, reporting as individual and satisfactory. 

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38 minutes ago, kaylee34 said:

Perhaps the OP will be kind enough to be the guinea pig on this experiment. 

This experiment has been tried and trued already. No Guinea Pig necessary. 

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1 hour ago, shifter said:

This experiment has been tried and trued already. No Guinea Pig necessary. 

I was fairly sure it had been but I’m coming down with that CRS disease. 

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8 hours ago, MarvBear said:

If you prepay the bulk of the loan and they still report each month, will the monthly legend reflect "ND"?

Has anyone ever answered this question?   I'm getting old and somewhat forgetful.  Could someone point me to a definitive conclusion?

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