Credit Mix and Scoring

[Trishco]

I'm trying to understand this....

I have umpteen cc's all reporting, 3 student loans reporting, my mtg of 8 yrs does NOT report, my SBA disaster loan does NOT report, nor does the car loans that I've had. 

Are my student loans counted as any other installment loan regarding scoring?

I'm basically (haha) not in the 700 club cuz of my preference to do business with the small town bank that I don't have to go through all the red tape with and so I'm penalized for it???

So, then in order to get my mid 600's to 700+, it would now be more productive to play the utilization/timing game right?

[RobertEG]

Wow, a lot of good questions.....

As for your student loans, FICO scores installment loans very, very differently as to type. 

There is no such thing as a plain vanilla installment loan in FICO scoring.  Mortgage loans are always scored differently, both because they are highly secured, and also because they are the last loan most people would ever default on.  Other secured loans, such as auto and student loans, are also scored under lower risk.  However, unsecured and other simple consumer loans are scored with a much higher risk, because they are both  most likely not be be paid should hard times strike,and also unsecured in event of non-payment.  I would not fret the student loans.  They add to your mix in a good way (providing that they are reporting to the CRAs, and coded properly as as student loan).

You have also learned a valuable lesson, from the FICO perspective.  If FICO is a concern, allways check before  you borrow as to whether the lendor will be reporting to the CRAs.  That is the onnly way FICO even knows if they exist.  No, you dont get FICO credit for borrowing from Uncle Jack!

If there is any way you can get Ma and Pa Bank to report your mortgage loan to the CRAs, I would suggest you pursue that!

YUP!  If you want a good FICO output, you have to give them the good input, and make sure it shows on your CR!

Message Edited by RobertEG on 05-18-2008 09:00 PM

Message Edited by RobertEG on 05-18-2008 09:36 PM

[Trishco]

Thank you Robert!

I can see clearly now that my path to 700+ is the utilization game!

[RobertEG]

Bingo, Trishco!!!!

It is sad but true, but you have to have credit and show you use it well to get it (FICO 101) !!!

The same comment I made about your prior mortgage applies equally to your prior auto loans.  FICO generates, and auto lendors use, an auto enhanced FICO score that looks back specifically on your prior payment history on auto loans, and adjusts your score for the auto enhanced score.  If  your prior auto loans were not reported to any of the CRAs, then they will not enhance your auto score.

FICO LOVES CREDIT, with low util, and good payment history reported to the CRAs.  Simple as dat!

Good luck!

Message Edited by RobertEG on 05-18-2008 09:46 PM