topic Re: Inactive Installment Loan: Is This Hurting Me? in Understanding FICO® Scoring

Inactive Installment Loan: Is This Hurting Me?

andyaycw — Wed, 19 Sep 2007 00:21:27 GMT

I currently have a student loan, which has payments deferred until two years after I graduate. I obtained the loan in in September 2006, and it was reporting to the CRAs up until March of this year.

I assume it stopped reporting because of inactivity; payments being deferred and I wasn't making any payments to it?

In any case, I am wondering if I made a payment to make it an "active" account again, would it help my FICO score? There are no prepayment penalties, and if this does help my FICO I figure I could just make a payment once every 3 months to keep it active.

Re: Inactive Installment Loan: Is This Hurting Me?

Anonymous — Wed, 19 Sep 2007 06:46:51 GMT

good question. i'm in the same exact situation as you.

Re: Inactive Installment Loan: Is This Hurting Me?

Anonymous — Wed, 19 Sep 2007 16:05:07 GMT

Sl's are required to update at least every 6 months.

I have heard of making payments rocking the boat-
Be sure to check with the servicer before you make payments to ensure they do NOT take it out of deferment.

Re: Inactive Installment Loan: Is This Hurting Me?

andyaycw — Fri, 21 Sep 2007 09:38:20 GMT

Well it has been just about 6 months with no updates.

On another note, according to CreditSecure and my FAKO scores that I pulled, it lists as a Positive factor on all three reports the following:

"You have no open installment loans, such as auto loans, on your credit report. This positively influences your credit score because lenders feel you are more likely to pay your other bills without the fixed monthly payment attached to an installment loan."

I find it interesting that it doesn't appear to see my "inactive" student installment loan, not to mention the fact that it sees having no installment loans as a positive.

I thought having open installment loans was a good thing because it contributed to your mix of credit?

Re: Inactive Installment Loan: Is This Hurting Me?

Anonymous — Tue, 02 Oct 2007 21:58:07 GMT

I did too andy. And I've read it here in different threads that ccc's love to see a mix of credit instruments. I'll go with that.

Message Edited by Sylviatob on 10-02-2007 02:58 PM

Re: Inactive Installment Loan: Is This Hurting Me?

haulingthescoreup — Wed, 03 Oct 2007 03:10:17 GMT

@andyaycw wrote:
Well it has been just about 6 months with no updates.

On another note, according to CreditSecure and my FAKO scores that I pulled, it lists as a Positive factor on all three reports the following:

"You have no open installment loans, such as auto loans, on your credit report. This positively influences your credit score because lenders feel you are more likely to pay your other bills without the fixed monthly payment attached to an installment loan."

I find it interesting that it doesn't appear to see my "inactive" student installment loan, not to mention the fact that it sees having no installment loans as a positive.

I thought having open installment loans was a good thing because it contributed to your mix of credit?

I've noticed that on some FAKO scores, the comments are quite different from those on a FICO score pulled the same day. Some are just crazy-contradictory. The day that EX posted my $50K HELOC, which they did classify as mortgage/ installment, one comment was that my installment balances were too high to the overall installment credit. This loan posted with only $3K used out of $50K, which reduced the util on my installment category. I try to tune the FAKO comments out and go with the FICO comments.

Re: Inactive Installment Loan: Is This Hurting Me?

andyaycw — Wed, 03 Oct 2007 06:51:45 GMT

Thanks for the replies. Yeah, I try to ignore anything FAKO related.

It has been more than 6 months now and still no updates to the student loan. Perhaps a payment to get it to report might make it an active account again?

Re: Inactive Installment Loan: Is This Hurting Me?

smallfry — Wed, 03 Oct 2007 09:34:37 GMT

To add to the confusion of the open/closed account theme and mix of credit wouldn't you think having a closed car loan or three on your reports would count towards your "mix" of credit?

Re: Inactive Installment Loan: Is This Hurting Me?

haulingthescoreup — Wed, 03 Oct 2007 10:49:58 GMT

smallfry wrote: To add to the confusion of the open/closed account theme and mix of credit wouldn't you think having a closed car loan or three on your reports would count towards your "mix" of credit?

I think that the 10% for "mix of credit" has to be the most unexplained part of FICO scoring. ilovepizza seems to be going out there taking a bullet for the rest of us, and seeing what happens to his scores with some loans. Maybe we'll all be more enlightened then. But yes, I would think that the car loans, open or closed would help. go figure

Re: Inactive Installment Loan: Is This Hurting Me?

cantretire — Fri, 05 Oct 2007 15:19:00 GMT

My gov't student loans are in forebearance. I asked on this site a month or so ago and was told that it doesn't lower your score to have the loan stalled. I'm curious to know what happens when we start to pay them. What effect does that have on FICO - does anyone know?