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Thread: Alternative types of installment loans besides car payment/student loan/mortgages?

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    Default Alternative types of installment loans besides car payment/student loan/mortgages?

    So, I have been doing a lot of research into credit lately and have learned that one of the ways to improve my score is to have different types of loans (as I'm sure most of you know). Right now I just have revolving debt (aka credit cards) so I'd like to diversify by getting an installment loan.

    However, the traditional types of installment loans are for cars, student loans, and mortgages. I don't need the car loan or student loan, and the mortgage is what I'd like to qualify in the future for.

    So, I'm trying to think of ideas for alternative installment loans that I could get.

    The only one I can think of that would actually be of use to me is Lasik eye surgery (NOT using Care Credit, since that shows as a revolving line).

    I don't really have any other big purchases planned, and don't want to pay a lot in financing costs just to improve my credit, so I feel like Lasik is a good option, but was wondering if anyone else had any ideas.
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    Default Re: Alternative types of installment loans besides car payment/student loan/mortgages

    ^^^ you're right that the essential distinction is a fixed amount, closed-ended ( installment ) loan for some specific purchase, versus a line of ( revolving ) credit without a specific purpose. But as you have discovered, due to less potential for extra lender profits ( from late fees, penalty interest rates etc. ), outside of secured loans for cars / boats / motorcycles, and outside of gov't guaranteed mortgage and student loans, virtually everything else has migrated to the line of ( revolving ) credit structure.

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    Featured Member MissSassyPickles's Avatar
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    Default Re: Alternative types of installment loans besides car payment/student loan/mortgages

    Thanks Melonie, that's what I figured but it doesn't hurt to ask!
    Quote Originally Posted by qurl View Post
    You are sassy AND smart Miss Pickles.

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    Default Re: Alternative types of installment loans besides car payment/student loan/mortgages

    If you are looking for unsecured installment loans, the best place to look is credit unions. But they are going to want excellent credit scores.

    From my experiance with credit reports, unsecured installment loans arent that good at helping scores. Long standing credit history is an important part of a FICO score. You cant get that from an unsecured installment loan. Most unsecured installment loans do not last more then a couple of years. The best way to build credit is a credit card you pay off each month. You dont have to diversfy really.
    If want to learn more go to ..http://www.myfico.com/CreditEducatio...YourScore.aspx

    Alot of time loan officers float around this myth because they want to pad their loan sales numbers. I have seen them sell it as a way to "clean up credit" and "get over bankruptcy". None of which is true. An unsecured installment loan wont magically erase the bad from a credit report.

    If you are wanting to buy a house the best thing you can do is have a good down payment. 20k or more.
    Nature knows no indecencies; man invents them. ~ Mark Twain


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    Featured Member MissSassyPickles's Avatar
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    Default Re: Alternative types of installment loans besides car payment/student loan/mortgages

    Thanks Vamp, always interesting hearing your experiences! I appreciate hearing things from the other side!

    If I can get one for my Lasik surgery that has close to no interest and fees, I figure it won't hurt but if it ends up costing too much to finance I won't do it.
    Quote Originally Posted by qurl View Post
    You are sassy AND smart Miss Pickles.

    "Well behaved women seldom make history." - Laurel Thatcher Ulrich

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    Skull Re: Alternative types of installment loans besides car payment/student loan/mortgages

    Rent to own on buying a house. Hard to report directly to credit agencies, but gives you a personal letter of reference for specific situations

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    Default Re: Alternative types of installment loans besides car payment/student loan/mortgages

    Do a couple secured loans, then an unsecured one once those are paid off? That's what I'm in the process of doing.

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    Default Re: Alternative types of installment loans besides car payment/student loan/mortgages

    @Pinups4 I've read a bit about rent to own but from my impression they didn't report to the credit bureaus until you are actually purchasing. There are also a few risks involved where you could lose the house and the extra money you paid so I don't know if that would be a good fit for me. Have you done one before?

    @GlamourRouge I think I might do something like that actually. I have to do some more research on them for sure. Dumb question: Do they banks care what the loan is for? Do they ask?
    Quote Originally Posted by qurl View Post
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    "Well behaved women seldom make history." - Laurel Thatcher Ulrich

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    Default Re: Alternative types of installment loans besides car payment/student loan/mortgages

    Quote Originally Posted by MissSassyPickles View Post
    @GlamourRouge I think I might do something like that actually. I have to do some more research on them for sure. Dumb question: Do they banks care what the loan is for? Do they ask?
    I doubt it, especially if its a secured one. You could probably walk in and tell them you want to build credit that way and they'd help you out.

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