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Installment Loan

Can anyone give me information about instalment loans or loans to pay off credit cards. What is the best way to raise my credit score? I was told to get an insallment loan and pay on time to that for 6 months and it should raise my score.

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Anonymous

Asked by Anonymous at 1:50 PM on Jan. 29, 2009 in Money & Work

Answers (3)
  • That's just another way of saying secured loan. One suggestion I read that makes perfect sense, is to take your tax refund and buy a CD. Ask the bank for a loan and use the CD as collateral. Pay back the loan on time and it will help your credit score. Then cash out the CD and you've got all the money back anyway.

    customcat2000

    Answer by customcat2000 at 1:57 PM on Jan. 29, 2009

  • Taking on more debt when you're already saddled with debt is not the smart way to raise your credit score. If you pay the cc you already have on time for 6 months.... that will raise your credit score. If you pay all your bills (loans, mortgage, etc) on time for 6 months that will raise your credit score. You should not, and don't have to take an additional loan to raise your credit score.... as a matter of fact the more debt you have the less your credit-worthiness is....... this doesn't make good sense and I'm SURE that Dave Ramsey would say DO NOT DO IT. Furthermore, creditors are not looking for "Paid off " credit cards... they're looking for "paid on time" credit cards where you're revolving balance is not more than like 50% of your available credit. More loans will not raise your credit score....It's confusing sometimes, but worth all the reading and learning in the end.


    PaceMyself

    Answer by PaceMyself at 2:11 PM on Jan. 29, 2009

  • PaceMyself is correct, the reason for using a loan for credit score purposes is for when you are trying to establish credit, not fix it.
    customcat2000

    Answer by customcat2000 at 3:33 PM on Jan. 29, 2009

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