Best avenue

[jocleveland]

The answers are across the board referencing adding an installment loan or not. I have three paid as agreed CC over the last year. I had two charge off CC's that I satisfied over 3 years ago. With no installment loans would it be wise to obtain an installment loan (if I can get one through a CU) and pay it off short term 3-5 months to improve my loan ability in the future Score will take care of itself as things fall off but I would like to buy a car in the next year. Fico EQ is 593 and Fico TU is 698. As soon as my 2003 BK falls off in January 2013 I'm thinking all scores will be in the 7's. Any advice?

[RobertEG]

I would also be interested in an answer to this question.

I had always presumed that once an installment loan is paid and closed, it is no longer scored under active mix of credit.

However, several have posted that it does still count in credit mix.

I dont understand how, for example, an auto loan paid off 9 years ago is any indication of a consumer's current mix of credit......

It might look good in a manual review..... but as an indication of current credit risk?

[pizzadude]

---

@jocleveland wrote:

The answers are across the board referencing adding an installment loan or not. I have three paid as agreed CC over the last year. I had two charge off CC's that I satisfied over 3 years ago. With no installment loans would it be wise to obtain an installment loan (if I can get one through a CU) and pay it off short term 3-5 months to improve my loan ability in the future Score will take care of itself as things fall off but I would like to buy a car in the next year. Fico EQ is 593 and Fico TU is 698. As soon as my 2003 BK falls off in January 2013 I'm thinking all scores will be in the 7's. Any advice?

---

Are you looking to finance a car anytime in the future ?  If so it might not be a bad idea to do this, assuming that the new account won't drop your Average age of accounts too much.

Also, as mentioned by Robert, the jury is still somewhat out on exactly how much closed installment loans weigh in your mix of credit.   So it's not really a bad idea, it's just not clear exactly how much it will help.

[MarineVietVet]

---

@RobertEG wrote:

I would also be interested in an answer to this question.

I had always presumed that once an installment loan is paid and closed, it is no longer scored under active mix of credit.

However, several have posted that it does still count in credit mix.

I dont understand how, for example, an auto loan paid off 9 years ago is any indication of a consumer's current mix of credit......

It might look good in a manual review..... but as an indication of current credit risk?

---

I'm one of those several who say that because this information comes from someone at myFICO who has forgotten more about credit than I'll ever learn.

Closed accounts still are counted into credit mix but are not as important and therefore not weighed as heavily as open, active accounts.

All I can do is relay the message.

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".

[jocleveland]

pizzadude wrote:

Are you looking to finance a car anytime in the future ?  If so it might not be a bad idea to do this, assuming that the new account won't drop your Average age of accounts too much.

I remember way back when, when the lenders would tell me "but the customer has no installment credit", and it made it difficult for some to get a car loan. Now I'm in the buyers seat and wondering if the same applies today. 

Yes I would like to finance a car in the fairly near future ( Septemberish) and was wondering if it would benefit the process of doing so. I will have NO outstanding credit balances by then. That is assuming I can get a CU to lend me a grand or two. I will not be worried by credit score as much as being loan acceptable. The Score will eventually take care of itself by being good paper.

[pizzadude]

---

@jocleveland wrote:

I remember way back when, when the lenders would tell me "but the customer has no installment credit", and it made it difficult for some to get a car loan. Now I'm in the buyers seat and wondering if the same applies today. 

Yes I would like to finance a car in the fairly near future ( Septemberish) and was wondering if it would benefit the process of doing so. I will have NO outstanding credit balances by then. That is assuming I can get a CU to lend me a grand or two. I will not be worried by credit score as much as being loan acceptable. The Score will eventually take care of itself by being good paper.

---

If that's the case then I would say it's a good idea;   having the mix of credit will be helpful, and the installment loan will look good to auto lenders.