Score simulator doesn't make sense

[Anonymous]

I'm not sure if the score simulator is very limitied in what actions can change a score or if it is just very wrong.  Example:   I have no current instalment loans, and havent for over 5 years. But I do have a car loan and 2 mortgages paid on time from before 5 years ago.  When I look at my scores/reports, it says whats good and bad.  One negative is that I don't have a recent installment account.  So my score is lower than what it would be if I had a recent installment account.  If I run the simulator, with a new car loan, then my score goes down.  So why the conflicting message?  Is the simulator only taking into account that I would have just opened the car loan?  If that is the case, it might make sense, since it's new debt without a track record of on time payments.  But the simulator doesn't allow or show what would happen if I get an installmnt loan and pay it on time for 3 months, 6 month or 12 months.   So what use is it, considering that there is no time frame of payments involved. 

[Anonymous]

One more thing...  If having a current installment loan is needed to maximize my score, should I just get a secured installment loan from a credit union?   I don't need a car loan and am not looking to get a mortgage for at least 2 years.  But I do want to get my score as high as possible in a couple years so I can get a good mortgage rate.

[SOGGIE]

Getting a secured loan from a CU is a great way, especially if they do by SP. I have done that. My house and truck are paid for. I'm not taking out an unsecured loan just to increase my score, but I am a firm believer in a CU secured loan without a HP.

[Anonymous]

Thanks for the reply, Soggie,   Could you tell me what sp and hp stand for?

[Anonymous]

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@Anonymous wrote:

One more thing...  If having a current installment loan is needed to maximize my score, should I just get a secured installment loan from a credit union?   I don't need a car loan and am not looking to get a mortgage for at least 2 years.  But I do want to get my score as high as possible in a couple years so I can get a good mortgage rate.

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Yes!  Much better and you don't need to get back into a new auto loan.    

[takeshi74]

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@Anonymous wrote:

Could you tell me what sp and hp stand for?

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FYI - this thread is linked in the Frequently Requested Threads sticky:

http://ficoforums.myfico.com/t5/User-Guidelines-General/Common-Abbreviations/m-p/88458

Be very careful relying on any simulator.  No one simulator can provide accurate results for all FICO models and your mortgage lender is probably going to use a mortgage-specific FICO.

As for scoring impact, an installment help with Mix of Credit but that's just one small factor.  You have to consider the overall impact to your credit from all factors including the impact to your AAoA, hit from the hard pull, etc.  It is generally not recommended to seek out an installment just for scoring purposes.  If you need one then definitely go for it.