MR.SVT wrote:On another note, I'm thinking of buying a new car in the next couple months and instead of paying full cash for it, I was debating whether to take a small loan (say 5-10k max). The idea behind this being that I'd pay that off within 12 months max via advanced payments just to throw on my report and hopefully build a stronger profile as the two credit cards are the only things I have reporting currently.
I have done some research into doing something similar (a share secured loan) and my finding has been that it's on balance not a good idea for anyone with a thin but clean history. You do get credit diversity, yes, but you also take an inquiry, hurt your AAoA, and take on another loan that reduces your disposable income in the eyes of lenders. Also, a credit card account can exist for decades, but paying an installment loan off in a year means the account will have a short lifetime.
Most of the people who report big gains from a short-term (under 5 years) installment loan reporting have baddies, so they get a big benefit from any additional good information. The same benefit doesn't usually exist for someone with your profile or mine.
As far as I can tell, the situation in which an installment loan really does help is when you've been paying off a mortgage or student loan for several years. There is a long history with the account, the inquiry has long fallen off, and the balance remaining is much smaller than the original one.http://creditcardforum.com/finance-charges-apr-compare/10889-secured-share-loan-smart-not.html
So, if you get a car - purchase it outright.