secured loan to increase credit score
i read a couple of times that a way to increase your credit score is
to get a secured debt - like opening an account at a bank or credit
union with $1000 and then get a secured loan from that financial
institute about the same amount.
Of course that cost you a bit in interest but if it helps to build up
your credit score.
Has somebody else heard about that - especially if that works?
And then a second question according to that:
is a bank/credit union pulling a credit report for a secured loan?
- That is definitely a helper on the credit scoring. I am about to do a
secured loan for $1000, and it is only at 3% rate. For $30, it's well
worth the help it will provide.
Another way to increase your score is to try to get all the negatives
removed from your report. I just had a BK 7 discharged in October. I
pulled my report from Equifuax on Nov. 1, and I disputed 4 accounts and
2 BK filings as "not mine." My first BK 7 converted to a 13 and was
dismissed. My 2nd BK 7 was discharged. Anyway, of the 4 accounts, 2
came back verfied, and 2 were deleted from my report. That's a plus!
On the 2 BK 7 filing disputes, get this......1 came back verfied and 1
was not verfied - thus it was removed from my report. Here's the
kicker......the BK that was discharged was removed from my report. The
one that I filed in Dec. 02 which was eventually dismissed, came back
verfied.
Hopefully, that will help with getting the other accounts that say
"included in bankruptcy" off that report. How can they say it was
included in bankruptcy if the only bankruptcy they are showing is one
that was dismissed?
I got lucky on my first dispute, and I will eventually dispute every
negative remark on my report. Be patient.
- A secured loan will report positvely to the credit reporting agencies.
A bank usually charges a small interest rate for the secured loan. Well
worth it when rebuilding credit.
As for a secured credit card, American Online Bank has the best card out
there. www.apbank.com
They have a low annual fee, report as "UNsecured" to all 3 CRAs, and
will convert to a true unsecured card after 18 months of perfect credit.
For cards, that is the way to go.
I think the original poster is looking for ways to rebuild his credit.
In this case, any low interest rate loans that are reported to the CRAs
is worth his time.