Reply
Established Contributor
lithium78
Posts: 929
Registered: ‎07-30-2011
0

Installment loan balances affect TU score?

I was under the impression that installment loans didn't affect TU FICO scores, but when I got my Walmart TU08 score it says that the high balance of my student loans has negatively affected my score.  I borrowed a lot in student loans for college and grade school and I've been making payments consistently for seven years, but the loan amount is still at 100% because for a time interest capitalized and then I could only make interest payments for a couple years.  It's going to take a few years to get significant movement on the balance of the student loans, so is this going to be a continuing issue moving forward?  Thanks.


Starting Score: TU: 566
Current Score: TU: 741 (Discover FICO); EQ: 755 (MyFico) EX: 774 (FAKO)
Goal Score: 800

Take the FICO Fitness Challenge
New Contributor
roastbeans
Posts: 56
Registered: ‎05-28-2013
0

Re: Installment loan balances affect TU score?

I'd like to know the answer to that as well.I just bought a car and was under the impression that having an installment loan can help my credit score,but yet some say that such a loan would negatively affect my score since its considered as debt? which is true?

Moderator Emeritus
llecs
Posts: 32,881
Registered: ‎08-04-2007
0

Re: Installment loan balances affect TU score?


lithium78 wrote:

I was under the impression that installment loans didn't affect TU FICO scores, but when I got my Walmart TU08 score it says that the high balance of my student loans has negatively affected my score.  I borrowed a lot in student loans for college and grade school and I've been making payments consistently for seven years, but the loan amount is still at 100% because for a time interest capitalized and then I could only make interest payments for a couple years.  It's going to take a few years to get significant movement on the balance of the student loans, so is this going to be a continuing issue moving forward?  Thanks.


While installment loans play a small part in FICO scoring, they will impact all FICO versions out there. It's not so much the util of that loan, as it is the balance.


myFICO is the consumer division of FICO. Since its introduction 20 years ago, the FICO® Score has become a global standard for measuring credit risk in the banking, mortgage, credit card, auto and retail industries. 90 of the top 100 largest U.S. financial institutions use the FICO Score to make consumer credit decisions.

>> About myFICO
FICO Score - The Score that matters
Click to Verify - This site chose VeriSign SSL for secure e-commerce and confidential communications.
Fair Isaac Corporation is a BBB Accredited Financial Service in San Rafael, CA
FOLLOW US Social Media Facebook Twitter Pinterest Google+