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I got an auto loan less than 2years ago from a local credit union. The problem is they only report to EQ. So my EX and TU show not having an installment account as a negative factor on my scores.
I have enough money to payoff that loan, should I do that or let it be open to report payments?
What type of installment loan can I get to increase my score?
If you see something as a negative factor regarding the absence of an installment, then my guess would be that the scores you are looking at are FAKOs, and the advice is FAKO-related. If it didn't come from myFICO, then ignore it. Not having an installment isn't a bad thing. You can easily hit into the 800s without one (and many here have). If you have the chance to PIF the loan, then by all means to save interest.
@llecs wrote:If you see something as a negative factor regarding the absence of an installment, then my guess would be that the scores you are looking at are FAKOs, and the advice is FAKO-related. If it didn't come from myFICO, then ignore it. Not having an installment isn't a bad thing. You can easily hit into the 800s without one (and many here have). If you have the chance to PIF the loan, then by all means to save interest.
Yeah, but FICO is a time-dependant algorithm, and if you're looking at maximizing your FICO potential in the lowest time possible, having an installment loan on the record is almost always beneficial.
Pretty much any type will do, refinance the auto loan to a lender that reports to the bureaus, open a personal loan, secured or otherwise, from any lender that reports. Get a mortgage even . If you have any of these three you're probably fine from the mix of credit function, but keep in mind as illecs suggests it's not strictly necessary, and we're not talking a massive FICO swing. Maybe 10 points or thereabouts I would guess, but in my estimation if it gets you over the hump on some score breakpoint, it might be useful.
I believe Illecs is on target. I apped, was approved for a new auto loan in March. At the end of June ( three months of payments), I had regained all of my lost Fico points and gained about ten more on my score. Of course, ymmv, I did make all payments on time.
@Anonymous wrote:I got an auto loan less than 2years ago from a local credit union. The problem is they only report to EQ. So my EX and TU show not having an installment account as a negative factor on my scores.
I have enough money to payoff that loan, should I do that or let it be open to report payments?
What type of installment loan can I get to increase my score?
My advice is the same as always; as long as you don't use up all your savings pay off any debt as fast as possible. Being debt free should always be your #1 goal with consideration of a score a very distant second.
Closed accounts still count into your credit mix and although open, active accounts are given more weight IMO the small difference is not worth staying in debt.