Auto Refinance through WF to get cash out of $5,000 for a Secured Personal Loan or Line of Credit

[TRC_WA]

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@Anonymous wrote:

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@Anonymous wrote:

I was under the impression that an automobile loan served the purpose of satisfying the installment loan part of making good use of the Fico algorithms?

I do not have an auto loan right now and I am considering a small secured or unsecured loan for the (hopeful) boost in my score.

But if you already have an auto loan, would you see an increase by obtaining an installment loan also?

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I would believe that would be the case as far as the Fico algorithm goes, but I want to be absolutely sure that they see multiple installment loans(ie auto loans, personal loans, and student loans) with timely payments and paid off to make sure I have a well balanced credit portfolio where 1/3 has been in installment loans and 2/3 has been in revolving lines.

I think getting a small secured loan would be ideal because qualifying for a conventional loan other than a student loan may be a bit difficult if you don't have previous installment loan history, but every circumstance is different and you may be able to get an unsecured loan.

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1 installment loan is all you need. You absolutely do not need a mix of installment loans.  Student loan, personal loan, car loan... doesn't matter which... 1 is all you need to have a "well balanced credit portfolio" as far as FICO scoring is concerned.

Installment loans don't have anywhere near the affect on your score that revolving credit cards do.

I have 5 student loans and had a $22k auto loan... then bought a $40k car.  Both reported at same time.  FICO score didn't move.  $22k loan paid off... FICO score didn't move.

I paid a $100 balance on my VISA down to $0... FICO score went up 3 points.

[Anonymous]

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@TRC_WA wrote:

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@Anonymous wrote:

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@Anonymous wrote:

I was under the impression that an automobile loan served the purpose of satisfying the installment loan part of making good use of the Fico algorithms?

I do not have an auto loan right now and I am considering a small secured or unsecured loan for the (hopeful) boost in my score.

But if you already have an auto loan, would you see an increase by obtaining an installment loan also?

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I would believe that would be the case as far as the Fico algorithm goes, but I want to be absolutely sure that they see multiple installment loans(ie auto loans, personal loans, and student loans) with timely payments and paid off to make sure I have a well balanced credit portfolio where 1/3 has been in installment loans and 2/3 has been in revolving lines.

I think getting a small secured loan would be ideal because qualifying for a conventional loan other than a student loan may be a bit difficult if you don't have previous installment loan history, but every circumstance is different and you may be able to get an unsecured loan.

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1 installment loan is all you need. You absolutely do not need a mix of installment loans.  Student loan, personal loan, car loan... doesn't matter which... 1 is all you need to have a "well balanced credit portfolio" as far as FICO scoring is concerned.

Installment loans don't have anywhere near the affect on your score that revolving credit cards do.

I have 5 student loans and had a $22k auto loan... then bought a $40k car.  Both reported at same time.  FICO score didn't move.  $22k loan paid off... FICO score didn't move.

I paid a $100 balance on my VISA down to $0... FICO score went up 3 points.

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Yes, I established that when I stated "I would believe that would be the case as far as the Fico algorithm goes". What I was referring to moreover when I stated that I would like a well balanced credit portfolio is for the purposes of the lending institution looking at my report and seeing that I have experience with multiple installment loans and revolving lines that show a track record of on time payments because approval for credit products is not solely based on the score, but also the information that shows up on the report. Another factor taken into account for some installment loans such as an auto and home loan is the debt to income ratio. I make these statements based on my experience working for Wells Fargo Bank in the past and currently State Farm Bank.