@Brooks14 wrote:
I'm confused, when I look on my credit score from Citi and Discover it states a major factor for me not having a higher score is because of lack of installment loans/non-mortgage.
It says this:
"Lack of recent installment loan information. There is either no recent activity or insufficient information about your installment loans"
Citi says the same thing, just worded differently.
Now why does it say that when I paid off my car loan just about 2 years ago? i thought it would continue to report for up to 10 years. I went on credit karma and it says last reported August 2015. Shouldn't it report every month? This is the same for all 3 credit bureaus.
Am I missing something here?
It's simply this: FICO 8 penalizes you for not having any open installment loans.
It's ridiculous, but that's what it is.
If you really want to get the points back, here's a way to do it without getting into debt:
Join Alliant Credit Union, take out a $500+ savings account, take out a $500 share secured loan secured by the savings account with a 48 or 60 month term, decline or cancel autopay, transfer $455 from the savings account towards the loan balance bringing the balance down to $45. Pay that off slowly over the balance of the term. Once the $45 balance reports the positive effects will be felt. On the downside, you will be getting a new account, which has a slightly negative effect on your scores.
