Should I get other loans?

[Anonymous]

I'm not an expert on this or the minutiae of FICO scoring, but I've read a lot of people report that their FICO scores fall once a share secured loan is paid off. I certainly wouldn't pay interest on a house or car unnecessarily, but it's not even clear to me that share secured loans are as wonderful (at least for people with a clean but installment-free history) as some people think.

Your signature shows a $1k CSP. What's the story there?

[Anonymous]

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@Anonymous wrote:

My credit score is affected by  "Lack of recent installment loan information". Should I delibrately get auto or mortage loans to fix this and increase my credit score?

I only have credit cards now

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I get this on all 3 of my reports, too.  You don't say what your scores are,  but just  a heads up, the only time I didn't get this on all  three of my reports was for the hot second I had an 800 on my Equifax. Even then the other two got that comment when they were in the 790s. I apped for a mortgage a few months ago so that one new inquiry dropped me  to the scores you see in my sig.  I don't close until May 3( fingers crossed) so until then, and actually probably for a few months after, I'll have that "lack of recent installment loan" buisness. I'm going to go against the grain and suggest that you concentrate on cleaning up your reports and making the most of what ever new cards you have.  If you need a car, buy a car. If you need a loan get a loan. I can tell you hands down you can get above a 790 without any kind of installmant loan on your account. The only thing on my reports hat is not in my sig is a closed carecredit account that closed for inactivity a few months back.

One last thing, the person who said your score will probably dip down if and when you get a new installment loan is correct. It's a new line of credit so you'll take a hit. 

[Anonymous]

I agree with the above it's kind of vague what the poster wants to do with the score or what short term financial goals are. That being said credit Builder programs in the credit union pay you interest they're not costing you interest like a regular secured credit card that you carry a balance on, or personal loan.
if you sign up two grand, you get two grand saved plus a buck in interest (fecesious)

[Anonymous]

My score are alright. Just that it I don't have any loans or mortgage history. I'm wondering if I take out a small secure loan, if it might bump up my score a bit. 

[Revelate]

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@Anonymous wrote:

I'm not an expert on this or the minutiae of FICO scoring, but I've read a lot of people report that their FICO scores fall once a share secured loan is paid off. I certainly wouldn't pay interest on a house or car unnecessarily, but it's not even clear to me that share secured loans are as wonderful (at least for people with a clean but installment-free history) as some people think.

Your signature shows a $1k CSP. What's the story there?

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Which is easily solved by simply getting another share secured loan, or similar, paying it ahead to a pretty ratio, before the old one falls off.  Or doing it after the original one reports closed and gaining all the points the person lost back.

It's a 20+ point swing on my dirty file between no installment loans, or installment loans at >80% utilization on FICO 8, and having a pretty installment utilization.  It's even larger than that for the pretty people (credit wise).  For FICO 8 (and FICO 98 for that matter, which is part of the mortgage trifecta) there's really not much excuse for not getting a share secured loan if you don't have open installment loans, the cost is absurdly trivial using the prepayment method and simply letting the tradeline hang out.

Fact is why someone would spend a yuppie foodstamp to check one's score, and not spend the same yuppie foodstsamp to improve it (or less since one can pay it further down from the $44 we were testing at), makes absolutely no sense to me .

[Grafton88]

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@Anonymous wrote:

yup you totally should buy a house to increase your credit score

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I can just see people going on an app spree, buying three houses over a weekend.  Then complaining when their score drops 15 points.

[Revelate]

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@Grafton88 wrote:

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@Anonymous wrote:

yup you totally should buy a house to increase your credit score

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I can just see people going on an app spree, buying tree houses over a weekend.  Then complaining when their score drops 15 points.

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Hey I picked up a mortgage which dropped my FICO 8 scores by ~24 points, I can complain if I want to! 

On the flipside my benchmark FICO 04 score didn't move at all, small bonus and I am now precisely 1 point above where I was a year ago on FICO 04, go me!