0/500
0/400
1/1000
48/2000 FICO EX 645,EQ 648,TU 648...
Installment loans do factor into your scores, but the util of those loans aren't near what revolving are. And to answer your other question, no the terms do not factor in. Just your payment history. So it doesn't matter how long the loan is for.
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Shogun wrote:but the util of those loans aren't near what revolving are.
What does this mean? That they don't affect score as significantly as revolving ones? If terms don't matter than I am just going to do a 500 dollar one for 6 months just to establish a positive tradeline because I have never had an instalment loan before.
Well even if instalment utilisation is only 10 percent of my score, that is still significant. My credit reports are thin and dominated by 2 big baddies. One I very confident that I will be able to get removed. It is a Federal Tax Lien that was released in 2008. The other baddie is a credit card account that I completely butchered with tons of really bad lates. I eventually settled the debt for less than the total and the account was closed but not until 2011. This second item has the potential to plague me for a long time. So with this sort of credit report profile, I thing an instalment loan would fatten up my reports and could have a significant impact on my score. The other benefit to me is as a savings vehicle. It would be as if I have an auto loan but I am actually paying myself back and at the end of the term I will have a nice chunk of changed to invest or do something else with. The cost is the cost of carry, the interest that I pay the bank on the loan but that is not a large amount of money in real dollars and is a price I am willing to pay to improve my score and to help me to save money in a diciplined fashion by paying an instalment each month. It is retraining me to save in a disciplined way.
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