revolving credit vs installment loan effect on FICO

[mloupagu]

I know that revolving credit debt (credit card) debt has a significant affect on your FICO score. Does installment loan debt (car loan) have as much as an affect?

Message Edited by mloupagu on 06-11-2007 08:11 AM

[Tuscani]

No.. Revolving is WAY more important.

[mloupagu]

More important how? Bad or good? I just paid off most of my revolving credit (credit cards) and now only have a couple of loan payments (a car and a boat) plus a mortgage. I am thinking of trading in my car for a newer one which will increase the amount of the installment debt, will that lower my FICO significantly?

[Tuscani]

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mloupagu wrote:
More important how? Bad or good? I just paid off most of my revolving credit (credit cards) and now only have a couple of loan payments (a car and a boat) plus a mortgage. I am thinking of trading in my car for a newer one which will increase the amount of the installment debt, will that lower my FICO significantly?

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More important in the fact that balance owed on revolving accounts is more heavily weighted when determining a score. Trading in your car for a new one won't have much if an impact on your scores.. If anything, it will lower them in the short term as you are opening a new TL and closing another.