Personal loan

[Crazzyjen]

Has anyone tried to apply for a personal loan after bankruptcy? I tried to apply for a $1000 personal loan through my credit union in December and was turned down because I had Chapter 7 showing on my credit report. The reason I needed the loan was because I had to schedule surgery, I told them that but it didn't matter. They told me to try again in 12 months. Anyway I dont need the money anymore but would still like to apply for a personal loan. I have heard that having a personal loan will improve your FICO score. Is it true? I have also read that you could open a CD account at the bank and use that as collateral for the loan. Is that true? Has anyone tried this and has it improved your score?

[supastar84]

I've been looking into the same thing. From what I have found out so far, there are some bank and credit unions that will give you a loan if you secure it with a cd or savings acct.

Specifically, I found a local (Atlanta) credit union that have what they call a installment savings loan. If you have $1000 in a savings account there, they will give you a loan for $1000 at an interest rate that is 2% higher than you savings account interest rate. If you don't need the loan money, you can put it in a CD and let it gain interest to make up for the interest you are paying against the loan.

Before going to this credit union I tried a bank (Regions), and was unimpressed with what they had to offer. It sounded like I'd have to pay a fairly high interest rate on a personal loan, even when securing it with a CD. Thus... I'd recommend checking with local credit unions over your bank.

As far as whether or not it will improve your credit score by much.... that is what I would also like to know. I can't imagine it not helping your credit score if you keep the loan out for atleast 1 to 2 years.

[FijiTime]

Personal loans work great for buying credit if they're reported. I've had 2 a year for the past several years and they worked wonders pushing my fico's into the low 800's prior to the drama that started me down the BK path.

I used to buy a CD for say 3000, place it as collateral for a 1 yr personal loan and then put the money from the loan into a savings account and setup an auto payment from that savings account to make the loan payment... It's fairly close to a wash between the interest so the credit doesn't cost that much...

The trick is that you get a ding for having either 3 or 4 active installment loans. So if you already have a car payment or two being reported keep that in mind if you're trying to buy a higher score. Nothing increases credit scores more than using credit, and making diligent payments over time...