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| I am trying to figure out if my credit history would be improved better by taking out a larger loan with a co-applicant or a smaller loan with just me as the applicant or it wouldn't make a difference at all. I am thinking of taking a loan only to improve my history and am capable and planning to pay it off early. Any inputs? |
Follow-Up Postings:
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- Posted by dave_donhoff (dwdonhoff@hotmail.com) on Tue, Mar 20, 07 at 17:53
| Hi Vinudev_liny, If you are talking about a closed-end loan, then the size is irrelevant to your scores. Take it small as you can functionally stand, and pay it consistently. Cheers, |
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| Would possibly opening a credit card account accomplish the same purpose. I would think if you did, and then did not use it, or used it some and paid it off each month, that it would be a good thing. I'm trying to think if there was any loan history on the recent report I pulled...I haven't had a loan in years, but was approved for a HELOC, which I have never used. Thoughts on a credit card instead?...anyone? It would save some interest over having a loan. Sue |
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- Posted by dave_donhoff (dwdonhoff@hotmail.com) on Tue, Mar 20, 07 at 20:10
| Hi Sue, HERE is the "ultimate credit score" formula; A) 2-4 installment accounts, never late There are a brazillian ways to screw up your credit... but the 6 items above are about everything there is to having great credit. Cheers, |
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| What if you have 12 open credit cards, most of which have not been used in 5 years? Do you close them or leave them alone |
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- Posted by dave_donhoff (dwdonhoff@hotmail.com) on Tue, Mar 20, 07 at 23:22
| Saphire, Just leave them alone. You're good. Dave Donhoff Strategic Equity & Mortgage Planner |
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| Thanks. It always annoys me when I pull our credit reports that the credit cards I signed up for in 1992 prevent us from breaking 800. Also, I can never take advantage of all the store promotions because I am always thinking, if I get the bloomies card (which I will rarely if ever use anyway), it will lower my score 10 points! I will be very excited when we finally buy that new house and I can forget about this nonsense since I do not plan to need credit after that |
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- Posted by vinudev_liny (My Page) on Wed, Mar 21, 07 at 11:38
| Thanks Dave and Sue, Yes, its a closed-end loan(had to figure out what that meant first!). So I guess I will go with the smaller loan and pay it off early. Is there a lower limit for borrowing below which it wouldn't make a difference to the credit score? Sue, good point about credit cards saving on interest but I guess I need a revolving account and an installment account. I was planning on getting a card sometime after this loan goes through. Thanks. |
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- Posted by dave_donhoff (dwdonhoff@hotmail.com) on Thu, Mar 22, 07 at 16:23
| Hi Vinudev, Is there a lower limit for borrowing below which it wouldn't make a difference to the credit score? Nope... a $25 loan for computer parts at your local geek shop scores the same on your report as a $250,000 mortgage. Just be on time ;~) |
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- Posted by vinudev_liny (My Page) on Thu, Mar 22, 07 at 21:59
| Thanks for the clarification, Dave! |
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