topic Re: Secured loan vs. auto loan affect on scoring in Understanding FICO® Scoring

Secured loan vs. auto loan affect on scoring

valley_man0505 — Tue, 27 Jan 2009 15:38:57 GMT

My GF took out an auto loan from a small local CU a couple years ago. We were looking at ther credit reports a couple days ago and I noticed the loan type is being reported as a "secured loan" (it may have said "secured personal loan" but I don't remember for sure now). Would it be better for this to report as an auto loan? Or won't it even matter?

Re: Secured loan vs. auto loan affect on scoring

SCF — Wed, 28 Jan 2009 03:00:07 GMT

I don't think it matters in FICO terms, there's only installment, revolving, mortgage and other/charge (PIF monthly card like Amex Green). The secured personal loan and the auto loan both count as revolving.

The only thing it might affect is your Auto-enhanced FICO, but not all auto lenders even use that score. If this is her only auto loan and lenders in the future shy away from her for lack of auto credit, you can always just explain that this particular loan was for a car and have them call your CU to confirm that.

Re: Secured loan vs. auto loan affect on scoring

valley_man0505 — Wed, 28 Jan 2009 14:11:16 GMT

I guess my concern is that I have seen people say that "consumer finance loans" can cause a score ding. I don't know if this notation makes it look like a consumer finance loan or not.

Re: Secured loan vs. auto loan affect on scoring

Junejer — Wed, 28 Jan 2009 14:57:37 GMT

Hey valley, I don't think that it's reporting as a CFL. You can always look at the accounts page (page 5, I think) on the myfico reports and see how it's reporting there. However, it should just be reporting as installment.