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if i pay off an installment loan

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Anonymous
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if i pay off an installment loan

if i pay off an installment loan will my score go down because its closed and will show less on my credit to debt ratio?
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Anonymous
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Re: if i pay off an installment loan



scoobjag wrote:
if i pay off an installment loan will my score go down because its closed and will show less on my credit to debt ratio?


Utilization on installment accounts (the debt to credit ratio you are referring to) is calculated separately from utilization on revolving accounts, and has a much, much smaller effect on your score.  The utilization effect of installment accounts is so small it's hardly even worrying about.
 
One thing you should be aware of, however, is that when you pay off your only open installment loan and it is then closed, you will lose the benefit to "credit mix" that the account was providing you.  This may be worth up to 10-20 points or so.
 
Remember, though, that this only applies if it is your only open installment loan.  If you have other open installment loans, you will not see this effect.
 
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