topic Re: installment loan almost paid off...will it have a negative once it no longer has a balance? in Understanding FICO® Scoring

installment loan almost paid off...will it have a negative once it no longer has a balance?

Anonymous — Wed, 12 Sep 2007 14:44:23 GMT

I have a student loan from 1998 that has 3 payments left. Once it's paid off, will it have a negative effect since an aged account will no longer have a balance?

Reason I wonder is because TU, in the grandiose f-up fashion they're famous for, market my student loan as "unrated or in bankruptcy" when I did a dispute on another account and since it was an aged account with perfect pay history, it dropped my score 60 points. The other two bureaus report it correctly and **bleep** it I'll get TU to fix it as well but it got me thinking...

...when it's paid in full...will that hurt me?

Re: installment loan almost paid off...will it have a negative once it no longer has a balance?

fused — Wed, 12 Sep 2007 19:45:25 GMT

This is a difficult one. Some report increases and decreases in scores while others virtually no change.

Re: installment loan almost paid off...will it have a negative once it no longer has a balance?

Anonymous — Thu, 13 Sep 2007 03:16:56 GMT

Nice 9 yo account that will be around for 10 more years.

IMO-I would not expect a score drop

Re: installment loan almost paid off...will it have a negative once it no longer has a balance?

smallfry — Thu, 13 Sep 2007 03:26:57 GMT

@Anonymous wrote:
Nice 9 yo account that will be around for 10 more years.

IMO-I would not expect a score drop

I agree.

Re: installment loan almost paid off...will it have a negative once it no longer has a balance?

fused — Thu, 13 Sep 2007 03:34:13 GMT

A moderator at this forum posted a modest drop (I think 15 or 20 points) in her scores after an installment loan reported PIF.

Re: installment loan almost paid off...will it have a negative once it no longer has a balance?

smallfry — Thu, 13 Sep 2007 04:43:17 GMT

@fused111 wrote:
A moderator at this forum posted a modest drop (I think 15 or 20 points) in her scores after an installment loan reported PIF.

Special case. History of the file.

Re: installment loan almost paid off...will it have a negative once it no longer has a balance?

RobertEG — Fri, 14 Sep 2007 03:15:39 GMT

It depends on how much it also affects your credit mix. If an installment loan is paid off, and it is the only installment loan reporting, it will decrease your %util,and thus inccrease your score for that element of the equation, but it may also adversely affect your credit mix, since installment loans are gone from the calculation on that part of the equation. Simply not a single category effect, so as otheres have said... hard to tell, it depends....