What other types of accounts do you have? Typically a similar score is based on some type of payment history, so it may not be necessary to take out another installment loan if you already have loans on your credit.
Current Score: Eq: 823 Tu: 830
@Kraner wrote:Currently I have:
2 open credit cards
1 closed secured installment loan (it was a loan on cd to start my credit)
I have to agree wit Stylez... Unless you are looking to make a home purchase in the next couple of years, I don't see the installement loan doing too much for your credit score. I think it would be better to save on the interest becasue the starter loan that you have will remain on your credit for 10 years showing a good payment history and you are also working with your credit cards. You may likely even be looking at a vehicle loan sometime soon in the future, so you will have that as another installment loan to use.
@Kraner wrote:I am a semester away from graduating undergrad. As of now I haven't needed to take out any sort of loan between fafsa, scholarships, and working 3 jobs.
Although I can pay my final semester off in full, would it at all benefit me to take out a loan? My score is already pretty solid for a 21 year old (748 TU, Wal), but student loans would add to the variety of credit I've used. Not sure if benefits would outweight the hassel, if any.
Thanks!
Only if you can get a small loan. There are people that take loans just to improve their credit scores. If you can get a 1k-2k loan with reasonable interests and set up auto-payments, there will be virtually no hassle and quite some benefits. 5% on a 1k loan is about $50 a year of interests. People pay that much in secured credit cards' annual fees to build credit anyway. The credit mix is going to give your score a strong boost, but once you pay off the loan, you will lose points; overall, you will still come out ahead, score-wise.
If you have to take a larger loan with insane interest, it's probably not worth it. Your credit score is already solid. Unless you have specific use of a high credit score such as a mortgage loan, you don't really need variety of credit.
