So back in August, I went to my local bank and applied for a loan of $1000. I asked for a secured loan which meant that I’d need to maintain at least $1000 in my checking account until I paid off the loan. This was no problem since I simply took their check and deposited it right back into my checking account. Lastly, I set up automatic payments where my loan would be paid from my checking account, so I wouldn’t mess it up and forget a payment. I decided to pay it off in just four months. So, I’m coming up on my last payment in December.

So far it’s worked quite well. My lowest FICO score was during the summer when I had charged my moving expenses to one of my cards. Since then my score has increased every month and my FICO score is higher than it’s ever been. I’ve gained over 50 points since I took out the loan. My last payment is in December, so I may see increases for a couple more months. I’ll come back and update if I do.

There are a couple of drawbacks. In order to get the secured loan, I needed to have $1000 in my checking account to begin with. This cut my interest rate in half. Without it, the interest would have been been 13% instead of 6.5%. Also, there was a fee of $60 to set up the loan, which ended up being much more than the actual interest I was paying. Essentially, I was paying the bank $60 for them to tell the credit agencies that I pay my loan payments. Lastly, you might have trouble getting an installment loan in the first place if your FICO score is too low.

Please note: I am not a financial adviser. I have never taken a class on economics or business or banking. I have only tried this once. Please don’t try this if you are confused, or if you have trouble making payments. If you take out a loan and then don’t repay it or miss a payment, it could make your score worse, not better. And I cannot guarantee this will work for you.