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Frequent Contributor
JediNeo
Posts: 299
Registered: ‎11-22-2013
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Negative: too few installment loans

I was looking at my CK profile and it's telling me this is one reason my score is not as high as it could be. I got an auto loan last year that I paid off in eight months. Should I have kept it open to boost my score?
NFCU Cash Rewards $14,000 | AMEX TE $12,400 | Sallie Mae $7,500 | WalMart MC $7,500 | Target Red Visa $6,000 | America Discount Tire $700

Last app 3/16/14. TU FICO 769 as of 11/08/14
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Gunnar419
Posts: 1,231
Registered: ‎01-23-2013
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Re: Negative: too few installment loans


JediNeo wrote:
I was looking at my CK profile and it's telling me this is one reason my score is not as high as it could be. I got an auto loan last year that I paid off in eight months. Should I have kept it open to boost my score?

Good for you for paying off that auto loan so quickly! You probably saved yourself a TON of interest, which is far more important than squeezing a few more points out of your score.

 

It's true that the scoring systems like to see a good mix of credit and that those of us who don't have auto loans and mortgages often see messages like the ones you got from CK. It's also true that that particular thing is not a huge deal. LOTs of people have scores in the high 700s and even 800s on credit cards alone.

 

If you're one of those people who likes to play around with your score just to see how high you can get then you probably will want to have installment loans. But if you're just interested in having a score that's high enough to earn you the best possible interest rates, you don't strictly need installment loans and will save yourself a lot of interest money by not having them.

 

Frequent Contributor
JediNeo
Posts: 299
Registered: ‎11-22-2013
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Re: Negative: too few installment loans

Thank you, yes I saved about $1000 in interest. Could have gotten the car in cash but with a thin file (@the time only had a store/1 CC <3 mo) felt it was best to finance and add to my report.

According to my Wal-Mart statement, fico is at 740. Not interested in adding another installment at the moment. Just was curious if for scoring purposes does an open account weigh more than one PIF.
NFCU Cash Rewards $14,000 | AMEX TE $12,400 | Sallie Mae $7,500 | WalMart MC $7,500 | Target Red Visa $6,000 | America Discount Tire $700

Last app 3/16/14. TU FICO 769 as of 11/08/14
Valued Contributor
Gunnar419
Posts: 1,231
Registered: ‎01-23-2013
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Re: Negative: too few installment loans

That was probably a great decision at the time, and now you'll have the loan on your CRs even after it's paid.

 

One thing to keep in mind is that when you check your scores anywhere they'll nearly always give you at leas one or two remarks about negatives that are impacting your score. That's true for everybody. Sometimes those negatives are minor, other times they aren't even real (a lot of people around here with long credit histories have reported getting messages about their credit histories being "too short").

 

You've got a good attitude. As long as your score is good and you can get credit on good terms, you're doing what matters.

 

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JediNeo
Posts: 299
Registered: ‎11-22-2013
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Re: Negative: too few installment loans

Thanks for the info.
NFCU Cash Rewards $14,000 | AMEX TE $12,400 | Sallie Mae $7,500 | WalMart MC $7,500 | Target Red Visa $6,000 | America Discount Tire $700

Last app 3/16/14. TU FICO 769 as of 11/08/14
Regular Contributor
n0smirc
Posts: 205
Registered: ‎08-22-2013
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Re: Negative: too few installment loans

[ Edited ]

The CK scoring algorithm is a bit of a different animal compared to FICO. I would use it to monitor your report data as versus rely on the score they provide. 

 

Now with myFico, I have a paid closed mortgage, and now I have 4 installment loans (2 of which will be paid by April timeframe & 2 which are student loans) It now lists a negative factor as "The remaining balance on your non-mortgage installment loans is too high."   OK, well whatever! lol My student loans will be paid aggressively and only time can help me now. 

 

Fico will see that you have the history of an installment loan  and count that towards your score, not against it. You get to enjoy another 10 years of that paid off loan being on your report, so enjoy it and the satisfaction of less interest paid and no monthly payment! 

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Valued Contributor
user5387
Posts: 1,794
Registered: ‎07-01-2010
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Re: Negative: too few installment loans


JediNeo wrote:
I was looking at my CK profile and it's telling me this is one reason my score is not as high as it could be. I got an auto loan last year that I paid off in eight months. Should I have kept it open to boost my score?

This is not a big one.

 

It's possible to have scores above 800 without installment loans, store cards, auto loans, or mortgages showing on your report.

 

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gdale6
Posts: 9,361
Registered: ‎12-13-2013
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Re: Negative: too few installment loans


n0smirc wrote:

The CK scoring algorithm is a bit of a different animal compared to FICO. I would use it to monitor your report data as versus rely on the score they provide. 

 

Now with myFico, I have a paid closed mortgage, and now I have 4 installment loans (2 of which will be paid by April timeframe & 2 which are student loans) It now lists a negative factor as "The remaining balance on your non-mortgage installment loans is too high."   OK, well whatever! lol My student loans will be paid aggressively and only time can help me now. 

 

Fico will see that you have the history of an installment loan  and count that towards your score, not against it. You get to enjoy another 10 years of that paid off loan being on your report, so enjoy it and the satisfaction of less interest paid and no monthly payment! 


"The remaining balance on your non-mortgage installment loans is too high."

 

This negative note followed me all the way down to pay off then came the "you dont have any current installment loan accounts" to replace it, I discount all of these messages as an installment loan has little effect on FICO unless you default on 1. The credit mix category of your score is only 10% of its entire makeup.

EX Cred Ses 12/14: 796 ; EX Fico 04 V2 06/14: 775; EX Fico 08 07/14 778 ; EX Fico 08 BC 11/14: 793
EQ Fico 05/14 781 ; EQ MPM 12/14: 750
TU Fico 8 12/14: 719; TU MPM 06/14 706
Regular Contributor
n0smirc
Posts: 205
Registered: ‎08-22-2013
0

Re: Negative: too few installment loans


gdale6 wrote:

n0smirc wrote:

The CK scoring algorithm is a bit of a different animal compared to FICO. I would use it to monitor your report data as versus rely on the score they provide. 

 

Now with myFico, I have a paid closed mortgage, and now I have 4 installment loans (2 of which will be paid by April timeframe & 2 which are student loans) It now lists a negative factor as "The remaining balance on your non-mortgage installment loans is too high."   OK, well whatever! lol My student loans will be paid aggressively and only time can help me now. 

 

Fico will see that you have the history of an installment loan  and count that towards your score, not against it. You get to enjoy another 10 years of that paid off loan being on your report, so enjoy it and the satisfaction of less interest paid and no monthly payment! 


"The remaining balance on your non-mortgage installment loans is too high."

 

This negative note followed me all the way down to pay off then came the "you dont have any current installment loan accounts" to replace it, I discount all of these messages as an installment loan has little effect on FICO unless you default on 1. The credit mix category of your score is only 10% of its entire makeup.


I find this hilarious. Truly. Of course when you start trending toward the good as compared the bad column, they start grasping for something bad to say about you. :smileyhappy: Be happy that they're grasping instead of something legitimately being really wrong. 


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