Personal loans to rebuild credit

[jdcat]

My hubby and I did the pre filing credit counseling last weekend and during the phone call at the end of the course the person at the credit counseling company suggested that we try to take out a personal loan from our bank for about two hundred dollars and pay it back fifty dollars a month for four months.

It sounds good in theory but am wondering if it's something that would actually have a whole lot of affect on ones credit? Perhaps if it's done a few times it would have an affect?

Has anyone here done this and had success as far as raising your credit score?

Other than a secured card my hubby and I are looking for ways to rebuild credit and this is the only other idea that appeals to us.

We're determined to do this without credit cards or auto loans.

[Intoodeep80]

My hubby and I did the pre filing credit counseling last weekend and during the phone call at the end of the course the person at the credit counseling company suggested that we try to take out a personal loan from our bank for about two hundred dollars and pay it back fifty dollars a month for four months.

It sounds good in theory but am wondering if it's something that would actually have a whole lot of affect on ones credit? Perhaps if it's done a few times it would have an affect?

Has anyone here done this and had success as far as raising your credit score?

Other than a secured card my hubby and I are looking for ways to rebuild credit and this is the only other idea that appeals to us.

We're determined to do this without credit cards or auto loans.

Its a great idea, and it has worked capitally for me.

I dont know that you'll get an unsecured loan from a bank... but I was able to get what is called a "Share secure loan" against my savings at my credit union. Its between 4-5% interest, reports to all 3 credit reporting agencies, and instantly boosted my score 100 points.

Definitely recommended. I admire your resistance to get another credit card- kudos to you!!

[DebtStinks]

My wife and I just got a secured loan from our credit union. We got a $3,000 loan that is secured by our savings. No prepayment penalty over 36 months at 3.1% interest. We just rolled the 3k from the loan back into our savings and they setup up automatic payments that pull right from our savings. So it's really a setup it up and forget it.

[cupcake]

My wife and I just got a secured loan from our credit union. We got a $3,000 loan that is secured by our savings. No prepayment penalty over 36 months at 3.1% interest. We just rolled the 3k from the loan back into our savings and they setup up automatic payments that pull right from our savings. So it's really a setup it up and forget it.

Great way to do it!

I tried to get a secured personal loan through my bank and was denied, even though I requested a loan for $2k to be secured by my savings account of approximately $15k. It made no sense to me whatsoever. The sole reason for the denial: BK.

[NanaOf11]

Great way to do it!

I tried to get a secured personal loan through my bank and was denied, even though I requested a loan for $2k to be secured by my savings account of approximately $15k. It made no sense to me whatsoever. The sole reason for the denial: BK.

Banks and Credit Unions are different animals. Live by different standards. You apply for that same "secured by cash" loan at a cu you will get it.

[CCsAreEvil]

I don't understand it, either. Really, how does a bank lose with a secured loan? Isn't there something in the terms that basically says, if you fail to pay the secured loan, they basically get to keep your secured money?

[DebtStinks]

Ya they didn't even pull a credit report... I asked first since I didn't want an inquiry. So I guess it just depends on where you bank.

[jdcat]

Thanks for the replies everybody!

So this actually sounds like a do-able plan then. I noticed though what seemed like high amounts for those of you who did go the personal loan route...well high for me anyway.....and now I'm wondering if a bank would even consider a smallish loan, like $500 tops???

[cupcake]

Thanks for the replies everybody!

So this actually sounds like a do-able plan then. I noticed though what seemed like high amounts for those of you who did go the personal loan route...well high for me anyway.....and now I'm wondering if a bank would even consider a smallish loan, like $500 tops???

Possibly, but you would most likely pay that off so quickly that it wouldn't help your credit score much...

[NanaOf11]

A "Credit Union" will give you a loan secured with cash, with a "Bank" however it is questionable. Yes, they will loan small amounts ($500) as well.

[jdcat]

Possibly, but you would most likely pay that off so quickly that it wouldn't help your credit score much...

That makes sense. Thanks for your input.

[jdcat]

A "Credit Union" will give you a loan secured with cash, with a "Bank" however it is questionable. Yes, they will loan small amounts ($500) as well.

Thanks Nana. We aren't with a credit union so we'll try our bank first and see what they say then go from there.

[mom2three09]

My wife and I just got a secured loan from our credit union. We got a $3,000 loan that is secured by our savings. No prepayment penalty over 36 months at 3.1% interest. We just rolled the 3k from the loan back into our savings and they setup up automatic payments that pull right from our savings. So it's really a setup it up and forget it.

This is what my dh & I plan to do too. We joined our local CU after filing our Chpt 7 BK in hopes of them helping us rebuild our credit after discharge. We're going to try to use dh's title to his truck to secure a small loan tho (instead of our savings)... and we want no more than $1,000 (and the value of the truck is $4K).

[Kamel407]

I called my Credit Union today and found out that I can establish an unlimited amount of secured loans (SHARE SECURED/CD SECURED LOAN).

I also found out you do not have to be a member of some CUs to establish the same secured loan above.

How many secured loans can you have concurrently before its no longer beneficial toward your credit score?

I was thinking 2 or 3, each from a different CU, for 12-24 months would be a good way to do this.

[mom2three09]

I called my Credit Union today and found out that I can establish an unlimited amount of secured loans (SHARE SECURED/CD SECURED LOAN).
I also found out you do not have to be a member of some CUs to establish the same secured loan above.

How many secured loans can you have concurrently before its no longer beneficial toward your credit score?

I was thinking 2 or 3, each from a different CU, for 12-24 months would be a good way to do this.

this is how our local CU works too. We went with a $500 secured loan for 12 mos @ 9.9% interest. Then 3 weeks later we were approved for an auto loan thru them for $10K @ 9.9%. I know we weren't approved for the auto because we took out the secured loan, but regardless we now have two open installment loans that will be soon reporting on our reports (and were discharged Nov.09).