Just perplexing to figure out how to move my fico measure up higher and if so does follow bank do cumulative loans if not that bank is the most appropriate to get a cumulative loan


bdancer222 February 4, 2014 at 9:12 pm

A secured loan is usually an installment loan — specific number of payments for a specific amount. All banks do secured loans — car loans are secured loans. It’s just a matter of collateral.

Installment loans build credit by making payment over time. You have to pay on an installment loan for at least 12 months to do much for your score. You pay interest the whole time.

A better way to build credit is with a credit card, even if have to get a secured card. use the card for regular purchases and pay the statement balance in full every month. It builds credit and avoids interest. It will still take about 12 months to do much for your score, but you won’t pay interest.

DON W February 4, 2014 at 10:02 pm

Do you mean a loan secured by cash you keep on deposit at the bank or credit union?

If so, most banks and credit unions do them. They are very low risk to the bank, so they give you a low interest rate.

The best place to do such a loan is the bank or credit union where you already have money on deposit. You can then just take out a loan on that amount, being aware that your deposit will be frozen until you pay off the loan (at least the amount you still owe will be frozen).

Such loans were popular when interest rates on savings were higher than they are today. Say you wanted to buy a $15,000 car. Yes, you have that amount in a savings account, but you didn’t want to withdraw it and wreck your savings. So, you could borrow against it with a secured loan, taking a loan for the $15,000 for the car. The fact that your savings were frozen was okay.

And yes, it should be reported to the credit bureaus, and in theory at least should help your credit score.

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