Utilization and Installment Loan

Uncle_Money · ‎11-23-2009

Hi Guys,

Does an installment loan have any effect on credit card utilization? I don't believe it does, but I figured I should check with the experts first.

Here's an example.

Let's say one has a high cc utilization and applies the funds from a loan to pay off the credit card balances. Shouldn't this lower utilization and boost the score?

Happy Thanksgiving to all!

Uncle Money

shyboy · ‎11-23-2009

Well one benefit of doing this would having a better mix of credit which in turn should increase your scores. In the end all you really doing is moving debt around. If you go with this method, just make sure not to use those cards afterwards.

Hope this helps

-------------------------------------------------------------------------------------------------Getting back in the credit game after major setbacks

Anonymous · ‎11-23-2009

@Uncle_Money wrote:
Hi Guys,

Does an installment loan have any effect on credit card utilization? I don't believe it does, but I figured I should check with the experts first.

Here's an example.

Let's say one has a high cc utilization and applies the funds from a loan to pay off the credit card balances. Shouldn't this lower utilization and boost the score?

Happy Thanksgiving to all!

Uncle Money

Lowering revolving UTIL will have have a greater upward influence on a FICO score than a new installment account will have a downward influence. Generally, moving debt from revolving to installment will improve your FICO scores

haulingthescoreup · ‎11-24-2009

Moved:

I just realized that cpacfp changed the name of this thread while also introducing a new topic. I have split off this post and replies to form a new thread titled "Opening personal LOC after inquiry made." We all realize that new members can have a little difficulty learning to navigate the forums, but changing the title of an existing thread is a no-no. All you have to do is go to the board/ individual forum that you want to post on, click "New Message", and start your thread in this manner. thanks!

Anonymous · ‎12-07-2009

Thanks for the info. Yes I am new. I should have it figured out now.

haulingthescoreup · ‎12-08-2009

No prob. I still get lost around here at times.

* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit?
FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007