@blazerein wrote:
Is it bad to have too much installment loans? I have 4 open right now - 2 Auto and 2 Personal loans. Will my score improve if I close one personal loan? I have enough money right now to pay in full one of my personal loan.
Appreciate the help.
Do you have any open revolving credit (CC's, lines of credit, etc.), and if so, how many?
Installment debt isn't usually a problem in scores. In fact, it helps to have one open installment. But if you don't have a lot of negatives, you might be getting hurt for "too many accounts with balances." Since by definition, all open installment accounts have balances, if you only have two open CC's, for instance, that means that at least 4 out of your 6 open accounts are reporting balances, a common ding, although not a huge one.
If you have 5 or more open CC's, and you only let one report a balance, the 4 CC's with $0 balances sort of counter-balance the installment accounts. But that's getting life complicated. I made that mistake back in the day, and now I'm trying to figure which card(s) to close to simplify my life.
If you have the money to pay off a loan, my vote is to do so. You're bound to be paying more in installment interest than you're earning in savings these days. Paying off the loan is like paying yourself the interest that you're currently paying the lender.
* 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
