Will a secured loan help my credit if payed before interest takes hold?
Thursday, December 31st, 2009 at
11:02 am
I was wondering if i get a secured loan for a thousand dollars and put up a thousand dollars as Collateral. don’t ask why i want to build my credit. my question is if i pay it off in less than a month before there is any interest does it count as you paid the loan off and go good for your credit. This is all new to me i thought how it worked was you need to put up something equal or greater. so 1000 dollars is equal or greater than the 1000 so can i pay it off under a month to avoid interest cost.
Quick House Sale
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Tagged with: Build My Credit • Collateral • secured loan • Thousand Dollars
Filed under: secured loan
depending on the loan documents, you will pay some sort of interest charge on the loan. Most loans such as you describe are “simple interest” loans – you pay interest from the date of the loan till the date of the payment.
Paying off the loan before the first payment is due will not help build your credit very much. It would be better if you paid it off in at least a couple monthly payments.
If it’s a loan from a bank then it will be reported on your credit as a loan which was “Paid as agreed” and should help your credit a little.
I can’t see it boosting your FICO credit score a great deal since you will only show one month of credit history. The biggest boost in your credit score takes place when you:
1)Pay your creditors month after month on time or early
2)Have loans for a long period of time (years)
3)Don’t have a lot of “inquiries” on your file (where you’ve applied for tons of credit cards, cars, furniture, etc)
Hope that helps!
Kevin
BaseBall
This is a very smart idea to do but on One Condition is to pay
in a very short time this if you really need to build up your
credit , tell you what !!! for more smart tips go to Only Best
Deals , I am sorry I cant post the site link here so open Yahoo
& type :
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now in search results the first line a site called Only Best
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GOOD LUCK , & Keep this Up Smart .
You would be better off to pay the loan off over 3 months and pay what little interest there would be, even if the APR was 12% you would only pay $10 per month, a bit less than $30 over the entire 3 month period. That is pretty cheap and effective way of building up your credit.
Nicole K above is a SCAM, how many CEO’s do you know that solicit business on a forum such as this? None unless they want to scam you out of your money. Besides she is violating Y/A Terms of Service