cancel
Showing results for 
Search instead for 
Did you mean: 

installment loans

tag
Anonymous
Not applicable

installment loans

How do installment loans affect your credit score?  I got one for 4000 to pay off a lot of credit card/revolving account debt, and now am only using 2 of 6 accounts about 25% utilization. What do you think this will do to my score?   I have 2 installment loans (counting this one) and then my car loan also. 
Message 1 of 5
4 REPLIES 4
Anonymous
Not applicable

Re: installment loans

Installment loans don't hurt your score as much in the utilization department. As soon as you have made a payment or two on the new loan you should get a boost as you are no longer at 100 percent on that loan. Since you already have installment loans you won't get a boost in your credit mix and the new account hurt your average age of accounts. That said, if it makes financial sense for you it is clearly a nice move. 2 of 6 accounts isn't bad (for revolvers) but it sounds like you also have 2 other loans, so that means 4 of 8 (still not bad). I recommend you pay down your other cards so that your total revolving util is 9 percent or lower. Still 25% is not too bad and your score should increase if that is better than before.
Message 2 of 5
Junejer
Moderator Emeritus

Re: installment loans

I wouldn't count on a score boost from making installment loan payments. About a year ago, I took out an installment loan with that hope in mind. I paid and paid and got not one point. When I paid it off, I got some points, but then again, I had a lot of other things going on at the same time.






Starting Score: 469
Current Score: 849
Goal Score: 850

Take the myFICO Fitness Challenge
Message 3 of 5
Anonymous
Not applicable

Re: installment loans

keep in mind this was used to pay down debts as well.  The one credit card is 25 % im not sure about the other the limit is 3000 and there is about 650 charged on it.   
Message 4 of 5
Junejer
Moderator Emeritus

Re: installment loans

You may see a score increase from the lower util, but it won't be from the installment loan payments. The other thing that you might try to do is to allow a small balance to report on one of your cards. 1-9% util is ideal.






Starting Score: 469
Current Score: 849
Goal Score: 850

Take the myFICO Fitness Challenge
Message 5 of 5
Advertiser Disclosure: The offers that appear on this site are from third party advertisers from whom FICO receives compensation.