HOW TO USE THE SECURED LOAN TECHNIQUE TO INCREASE (HACK) PAYMENT HISTORY FACTOR OF A CREDIT SCORE
Building credit with a loan can be a great way to improve your credit score, allowing you to access better terms and rates on future loans. While it can be a great way to improve your credit score, it is important to understand the risks involved and the steps you need to take to ensure you are taking advantage of the opportunity in the best way possible.
The first step to building credit with a loan is to ensure you are eligible for a loan. This means you need to have a good credit score, a steady income, and a good credit history. Without these, you may not be able to qualify for a loan, so it is important to make sure you are in the best financial shape possible before applying for a loan.
Once you have established that you are eligible for a loan, you need to decide what type of loan you want. This will depend on your needs and goals, and should be carefully considered. Do you want a secured loan, an unsecured loan, or a personal loan? Each type of loan has its own advantages and disadvantages, so it is important to research and understand each one before making a decision.
After you have decided what type of loan you want, you can start looking for lenders. You should take the time to research each lender and look for the best terms and rates available. It is also important to make sure you understand the repayment terms of the loan and any fees or penalties associated with it.
Finally, it is important to make sure you make all payments on time and in full. This is the best way to ensure you are taking advantage of the opportunity to build credit with a loan. Every payment should be made on time and in full to ensure you are building a good credit score.
Key Points:
1. Establish eligibility for a loan
2. Decide the type of loan you want
3. Research lenders for the best terms and rates
4. Understand the repayment terms and associated fees
5. Make all payments on time and in full
People Also Ask:
Q: How do I build credit with a loan?
A: Building credit with a loan can be done by establishing eligibility, choosing the right loan type, researching lenders for the best terms and rates, understanding the repayment terms, and making all payments on time and in full.
Q: Is it worth taking out a loan to build credit?
A: Taking out a loan to build credit can be a great way to improve your credit score, allowing you to access better terms and rates on future loans. However, it is important to understand the risk involved and make sure you can comfortably make all payments on time and in full.
Q: What types of loans are best for building credit?
A: Secured loans, unsecured loans, and personal loans are all types of loans that can be used to build credit. It is important to research and understand each one before making a decision.
How To Build Credit With A Loan – Highest Rated?
The Secured Loan TECHNIQUE (not “Secured Loan”) is a great tool to add many payments to a credit history, for very little cost. To use the Secured Loan Technique, simply apply for a loan that won’t impose any additional costs for prepaying the loan amount to below 90% of its original balance. Then make minimum payments on the remaining low balance for as long as possible. Here’s a summary on using the #SecuredLoanTechnique:
1. Get a loan.
2. Immediately prepay the loan to get its balance low.
3. Make minimum payments on residual low balance.
Make certain the Terms of the loan don’t impose any extra fees or penalties for prepaying the loan. The goal is to get payments reported in a credit history for as little cost as possible. This can be done with credit cards as well, and cards are a much simpler option at avoiding fees and interest because they can be paid in full every month. But the hard part for many Consumers with no history or rebuilding credit, is that it’s usually more difficult to get approved for cards than some loans.
I mention using Discover as a friendlier loan provider because of their Terms don’t impose any fees as of June 2020. Another option is a credit builder loan which I go over in another video. See Screaming Lincolns video on Credit Builder Loans here:
What makes the Secured Loan Technique, and Credit Builder Loans, great options for building credit is how they build the Payment History factor of a credit score. Using either the Secured Loan Technique or Credit Builder Loans is an excellent choice at padding that Payment History factor with very little out of pocket cost. I go over the amortized interest cost over the entire term of a $30,000 loan as an example in this video. For more information on how to build the #PaymentHistory factor of a credit score, see Screaming Lincolns video here:
Where are you at in your credit journey??? Let me know how you’re doing, or if I can help, in the Comments!
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What are you waiting for???
~Cap
DISCLAIMER: I have NO affiliation or agreement with any of the other Lenders or Entities discussed in this video.
DISCLAIMER: This video is for informational purposes only. Consult a licensed finance professional or credit specialist as needed.
DISCLAIMER: All information presented here has not been reviewed or approved by any of the Lenders discussed in this video.