Why does installment loan pymts never change my score?

[Anonymous]

I took out an installement loan 30 months ago to help increase my fico score.  There are only six months left of fixed payments.  The $256 monthly payment is ALWAYS made on time, and yet I was so surprised to see that despite the positive reporting, my score never increases. 

My father co-signed this loan for me (I'm the primary account holder); would this be why my score doesn't increase or will it simply just up once the loan is paid off in full this December?

Any insight is greatly appreciated! :-)

[cdtotten]

The reason it isn't causing a score increase is due to the fact that FICO scoring does not take into account installment loan utilization. Whether the account is at 99% or 1%, it won't matter.

That being said, it is helping you by providing a component of credit mix, and it is also helping you by providing a positive account that will age well and look good. Once it's paid off, if you have no other installment loans, you will lose the couple points you gained for having it in your mix, but it will go on being a positive account for 10 years and help your AAoA.

[Anonymous]

CRAZY!  I had no idea it wasn't being counted... the whole point of taking it out was to help raise my score (I even told this to the banker who suggested a three year term would have the best impact).   geez......

If payments are missed through on installement accounts then I suspect that would probably cause the score to go down?  Ironic, no doubt

Soooo, other than keeping a low utilization on my credit cards, what else can I actively do to shoot my score up?  Would taking a line-of-credit out and not using it help with that?  Anything else or is it just a matter of time?

I appreciate your suggestions as I'm apparently FICO-challenged ;-)

[MarineVietVet]

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@Anonymous wrote:

CRAZY!  I had no idea it wasn't being counted... the whole point of taking it out was to help raise my score (I even told this to the banker who suggested a three year term would have the best impact).   geez......

If payments are missed through on installement accounts then I suspect that would probably cause the score to go down?  Ironic, no doubt

Soooo, other than keeping a low utilization on my credit cards, what else can I actively do to shoot my score up?  Would taking a line-of-credit out and not using it help with that?  Anything else or is it just a matter of time?

I appreciate your suggestions as I'm apparently FICO-challenged ;-)

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What other TL's (Trade Lines) do you have on your reports? Credit cards, car loans, mortgages?  Sometimes it depends on what you have presently that might dictate what needs to be done to improve things.

If you have a short credit history then sometimes letting everything age is all you can do.

Being added as an AU can help your history IF the account is older than any of yours, IF the payment history is long and clean, IF the utilization is very low, and IF it will report to the CRA's. Not all cards will do this. You need to ask the company first. You will inherit the entire history of this account. One caveat however; if this account starts to go south your credit will be affected as well. Keep that in mind.

From a BK years ago to:
9/09 EX pulled by lender 802
3/10 EQ- 800
4/10 TU -772

You can do the same thing with hard work

Credit Scoring 101
Common Abbreviations
Frequently Requested Threads
Whats In Your FICO Score

[Anonymous]

Hi there,

My 97-2003 mortgage though always paid, was not reported.  Same goes for my six year car loan that ended in 2008 and a $30,000 business loan I had through an enterprise business centre.  All of which had 100% payment history but does not show up on any of my bureaus.  Bummer :-(

Prior to 2003 I had R1 credit and was doing very well, but as the story often goes was laid off and decided to go into business for myself.  Needless to say it was a cash crunch and hurt my credit rating big time.  Everything has long since been paid but the effect was lasting

I've had a four year Mastercard (which I foolishly cancelled five months ago, I had no idea that the age of an account made a difference!)  I also was not aware of utilization ratio, and thought that paying it in full every month would be great for my score and that maxing it out didn't matter as long as I paid it every month.  Boy-ohboy was I wrong on that one!  Having just learnt all this matters from this forum I sent them a letter more or less begging to have them reopen the same account

I currently have another Mastercard that is only a year old and have another visa that was opened this month.

There is one paid in full installement account with a zero balance and the existing installement account that will be paid in six months.

My husband and I took out a mortgage a year ago through our credit Union and like all of his other credit union loans, none of them are reported to the bureaus.

I'm thinking of taking out a line of credit and paying one small bill every month from it but otherwise just not use it to shoot my rate up.  Do you think that would work??

Thanks for any help!

[MarineVietVet]

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@Anonymous wrote:

Hi there,

My 97-2003 mortgage though always paid, was not reported.  Same goes for my six year car loan that ended in 2008 and a $30,000 business loan I had through an enterprise business centre.  All of which had 100% payment history but does not show up on any of my bureaus.  Bummer :-(

Prior to 2003 I had R1 credit and was doing very well, but as the story often goes was laid off and decided to go into business for myself.  Needless to say it was a cash crunch and hurt my credit rating big time.  Everything has long since been paid but the effect was lasting

I've had a four year Mastercard (which I foolishly cancelled five months ago, I had no idea that the age of an account made a difference!)  I also was not aware of utilization ratio, and thought that paying it in full every month would be great for my score and that maxing it out didn't matter as long as I paid it every month.  Boy-ohboy was I wrong on that one!  Having just learnt all this matters from this forum I sent them a letter more or less begging to have them reopen the same account

I currently have another Mastercard that is only a year old and have another visa that was opened this month.

There is one paid in full installement account with a zero balance and the existing installement account that will be paid in six months.

My husband and I took out a mortgage a year ago through our credit Union and like all of his other credit union loans, none of them are reported to the bureaus.

I'm thinking of taking out a line of credit and paying one small bill every month from it but otherwise just not use it to shoot my rate up.  Do you think that would work??

Thanks for any help!

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This is just my opinion. I would not apply for any more credit right now. You have an account that is only a month old. Another application would require another inquiry and another new credit account in your file. I would keep the two CC's you have right now and use them to tweak your score. If you are looking for every possible point

Optimal credit utilization for FICO scoring purposes seems to be:
Total revolving and individual utilization > 0 and < 9%, the lower the better, and
Reporting a balance on less than half of your revolving TL's, and
Reporting a balance on half or less of all TL's.

But if you are not looking for new credit any time soon your score really doesn't matter. Until a credit application is submitted a FICO score is more "potential" than actual. In my mind it doesn't even exist until it is pulled by a lender. It has no memory and is a snapshot of your financial situation at the moment it is pulled.

I would keep paying on time, work on getting CC uitization low, don't apply for credit you don't need, and let everything age.

My 2 cents.

One other thing. Have you talked to the CU about why none of your installment loans are reported to the CRA's? I have a loan with a local CU that doesn't report to TU but does to EQ and EX. So your CU doesn't report to any of the CRA's?

From a BK years ago to:
9/09 EX pulled by lender 802
3/10 EQ- 800
4/10 TU -772

You can do the same thing with hard work

Credit Scoring 101
Common Abbreviations
Frequently Requested Threads
Whats In Your FICO Score

[Anonymous]

Hi, Thanks for the info and good advice!

Nope our credit union doesn't report a thing to any of the bureaus. They are a small country branch which is why I suspect there is no reporting.  My husband's been dealing with them for years and has given them significant business over the years (he's a farmer) that they don't even request a score.

I won't be needing a loan anytime soon but I was to get my score up and in good repair as soon as possible.

Will hold off on the LOC then and just use the two cards then.  I'm keeping it sub 35% right now but just found out that the one card reports on the 20th of the month, so I'll just make sure that it is paid off by the 18th everymonth to capitalize on the points :-)

I'm wondering if I call the CU and ask them to report my mortgage if that would hinder or help my efforts?  There is a $200,000 balance and the mortgage is just a year old but with on time payment history

[MarineVietVet]

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@Anonymous wrote:

Hi, Thanks for the info and good advice!

Nope our credit union doesn't report a thing to any of the bureaus. They are a small country branch which is why I suspect there is no reporting.  My husband's been dealing with them for years and has given them significant business over the years (he's a farmer) that they don't even request a score.

I won't be needing a loan anytime soon but I was to get my score up and in good repair as soon as possible.

Will hold off on the LOC then and just use the two cards then.  I'm keeping it sub 35% right now but just found out that the one card reports on the 20th of the month, so I'll just make sure that it is paid off by the 18th everymonth to capitalize on the points :-)

I'm wondering if I call the CU and ask them to report my mortgage if that would hinder or help my efforts?  There is a $200,000 balance and the mortgage is just a year old but with on time payment history

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I can't see any reasons this might hurt you. By all means call. I would be curious as to why they don't report any loans to any CRA.

From a BK years ago to:
9/09 EX pulled by lender 802
3/10 EQ- 800
4/10 TU -772

You can do the same thing with hard work

Credit Scoring 101
Common Abbreviations
Frequently Requested Threads
Whats In Your FICO Score

[Anonymous]

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@MarineVietVet wrote:

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Jped wrote:  I'm wondering if I call the CU and ask them to report my mortgage if that would hinder or help my efforts?  There is a $200,000 balance and the mortgage is just a year old but with on time payment history

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I can't see any reasons this might hurt you. By all means call. I would be curious as to why they don't report any loans to any CRA.

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+1.  I would call as well.  Remember that balances on mortgages are an entirely different animal than balances on revolving accounts, so your $200,000 balance is not going to hurt you.  The plus side is that your CR's would show a mortgage.  If you'd like, please let us know what your CU says - I'm curious to know that a CU might exist that doesn't report to any CRA.