topic Re: Question on Installment Loan in Understanding FICO® Scoring

Question on Installment Loan

Red1Blue — Tue, 03 Jun 2008 01:36:16 GMT

I have checked my TU Fico Scores. I see this

The remaining balance on your non-mortgage installment loans is too high. Check your installment loans to calculate your remaning balances
FICO High Achievers [?] have paid down an average of 35% of the principal on their installment loans.

The installment loan I have is car loan. It started at 6K and now the present balance is around 2950. Why am I getting the above negative message? Should pay it down? How much should I pay it down to get a boost in my scores? Any suggestions?

Re: Question on Installment Loan

smallfry — Tue, 03 Jun 2008 01:39:59 GMT

@Red1Blue wrote:
I have checked my TU Fico Scores. I see this
The remaining balance on your non-mortgage installment loans is too high. Check your installment loans to calculate your remaning balances
FICO High Achievers [?] have paid down an average of 35% of the principal on their installment loans.
The installment loan I have is car loan. It started at 6K and now the present balance is around 2950. Why am I getting the above negative message? Should pay it down? How much should I pay it down to get a boost in my scores? Any suggestions?

I had a car loan for 25K paid it down to 14K still saw that message. Not until I had paid it down well under 5K did it finally cease being negative number 3 for me. So I don't know where the cut off is but its somewhere between 15-55% of the original loan amount. At least for me it was. Now I just have two neggies on my TU.

Re: Question on Installment Loan

Red1Blue — Tue, 03 Jun 2008 01:43:20 GMT

Did you see any score boost when your 3rd negative item went away? I am keeping this loan so I can keep different types of loans. I'll try to bring it down to $1K and see how my scores look like and then pay the rest in scheduled installments so it can add more months to the loan.

smallfry wrote:

I had a car loan for 25K paid it down to 14K still saw that message. Not until I had paid it down well under 5K did it finally cease being negative number 3 for me. So I don't know where the cut off is but its somewhere between 15-55% of the original loan amount. At least for me it was. Now I just have two neggies on my TU.

Re: Question on Installment Loan

Anonymous — Wed, 04 Jun 2008 23:52:11 GMT

concorduser,

You are probably better off FICO wise by paying it off as scheduled. I doubt you are taking much of a hit for that installment balance. You are gaining mix points which likely at least offsets it, judging by the score drops people have suffered when they have no installment loans. If you then just get a new loan to keep that portion of your score you will take an age hit.

Re: Question on Installment Loan

smallfry — Wed, 04 Jun 2008 23:58:14 GMT

@Red1Blue wrote:
Did you see any score boost when your 3rd negative item went away? I am keeping this loan so I can keep different types of loans. I'll try to bring it down to $1K and see how my scores look like and then pay the rest in scheduled installments so it can add more months to the loan.
@smallfry wrote:

I had a car loan for 25K paid it down to 14K still saw that message. Not until I had paid it down well under 5K did it finally cease being negative number 3 for me. So I don't know where the cut off is but its somewhere between 15-55% of the original loan amount. At least for me it was. Now I just have two neggies on my TU.

I plan on paying it down to around a hundred bucks or so then making the last payment around the middle of 2012. TU went up 14. No other changes.

Re: Question on Installment Loan

RobertEG — Sun, 08 Jun 2008 00:42:49 GMT

Agree, Install loan util pales in comparison to revolv util in scoring, and the install loan also maintains credit mix. Paying earlier, IMHO, is primarily a financial decision, and not of major FICO singificance.

Re: Question on Installment Loan

Junejer — Tue, 10 Jun 2008 04:16:02 GMT

@smallfry wrote:

@Red1Blue wrote:
Did you see any score boost when your 3rd negative item went away? I am keeping this loan so I can keep different types of loans. I'll try to bring it down to $1K and see how my scores look like and then pay the rest in scheduled installments so it can add more months to the loan.
@smallfry wrote:

I had a car loan for 25K paid it down to 14K still saw that message. Not until I had paid it down well under 5K did it finally cease being negative number 3 for me. So I don't know where the cut off is but its somewhere between 15-55% of the original loan amount. At least for me it was. Now I just have two neggies on my TU.

I plan on paying it down to around a hundred bucks or so then making the last payment around the middle of 2012. TU went up 14. No other changes.

Smallfry, you are going to have to ensure that they code the payment the correct way in order for that $100 to hang out there for the next four years. In essence, they are going to have to make 48 manual payments on that loan in order for it to work. Otherwise, it will be applied as an extra principal payment and you will be due again next month for the $100.

Re: Question on Installment Loan

mrlimo — Wed, 11 Jun 2008 01:12:20 GMT

concorduser wrote:
I have checked my TU Fico Scores. I see this

The remaining balance on your non-mortgage installment loans is too high. Check your installment loans to calculate your remaning balances
FICO High Achievers [?] have paid down an average of 35% of the principal on their installment loans.

The installment loan I have is car loan. It started at 6K and now the present balance is around 2950. Why am I getting the above negative message? Should pay it down? How much should I pay it down to get a boost in my scores? Any suggestions?

as I had read before on here. Sometimes fico just looks for things just to put in the negative lines. How does everything else on your report look? is your overall dti high or just on that line? If it were myself I would pay as you regularly would. If you are planning on paying that much on it to save interest is one thing, but if your spreading yourself thin money wise just to scrape up enough to bring down to $1000.00 I would say is unwise for budgeting and long term fico worthy wise.

my 2 cents

Re: Question on Installment Loan

Anonymous — Wed, 11 Jun 2008 01:38:17 GMT

That message does seem to be one of the more random that FICO dispenses.

Just because high achievers have paid off 35% on average doesn't mean there is a score boost from being at or below that figure. Most people don't seem to have any real boost from lower install utility until it gets down to the final year from what I have read on here.