Personal loan

[TravellingNomad]

Not about credit card..but figured since its about an application, this would be the place to ask.

Is a personal loan considered an installment loan? MyFico report say that not having a mortgage/installment loan is "hurting" my score. So I was thinking maybe when my 0%  from 2 cc's expire at the end of the year, I can apply for a personal loan from my CU to pay off the cards. By that time the total balance from both cards will be just under $10k. Was planning on paying it off with the loan.

The funds are available for the balances to be paid off by the time 0% expires...but wouldn't mind paying interest on a personal loan of it will help my score having a personal loan report. Of course will pay it off within 6-8 months. Just want to have payment history report.

Would that be an installment loan the cr is referring to? Any input is appreciated.

[Anonymous]

---

@TravellingNomad wrote:

Not about credit card..but figured since its about an application, this would be the place to ask.

Is a personal loan considered an installment loan? MyFico report say that not having a mortgage/installment loan is "hurting" my score. So I was thinking maybe when my 0%  from 2 cc's expire at the end of the year, I can apply for a personal loan from my CU to pay off the cards. By that time the total balance from both cards will be just under $10k. Was planning on paying it off with the loan.

The funds are available for the balances to be paid off by the time 0% expires...but wouldn't mind paying interest on a personal loan of it will help my score having a personal loan report. Of course will pay it off within 6-8 months. Just want to have payment history report.

Would that be an installment loan the cr is referring to? Any input is appreciated.

---

Personal loans, car payments, morgages etc are all considered installment debt. It's a decent idea to have *something* to round out a credit portfolio. What I did first, before my car loan, was get a *small* personal loan, 2k at 24mo(can't remember interest)

In order to get the best result out of a loan, you wanna pay the majority of it's life. Cutting installment too soon doesn't yield the same benefits. 

All I did with mine, was put the loan into my savings, and have it set to pull the payment every month. Didn't use a dime of it, and paid the small interest on it. It's easier not to get into any trouble paying stuff back that way.

[b_diddy]

+1.  Exactly.

Do not take out any personal loan from a consumer finance type company -- I get loads of these offers in the mail.  Some scoring models ding you for these types of loans as they are considered predictors of future failure.  Personal loans from banks and CU's won't get you the same score penalty.

[TravellingNomad]

Thanks for the input. Yeah I had a small loan from One Main in the past...not gonna happen again.

Since a personal loan from my CU will help improve my credit picture, yeah maybe I'll go that route. Again thanks for the insight!

[Anonymous]

---

@TravellingNomad wrote:

Thanks for the input. Yeah I had a small loan from One Main in the past...not gonna happen again.

Since a personal loan from my CU will help improve my credit picture, yeah maybe I'll go that route. Again thanks for the insight!

---

Yes, CUs are much better for personal loans with decent rates.