topic Re: Question about loans in General Credit Topics

Question about loans

Anonymous — Tue, 05 Jan 2016 14:40:28 GMT

Good morning. I was wondering what's the purpose of getting a personal loan? I have 3 major cards, a student loan, and auto loan. I keep seeing on some post that getting a loan will help scores so just wondering. Current scores TU 658 EX 653 EQ 630

Re: Question about loans

OmarGB9 — Tue, 05 Jan 2016 14:52:34 GMT

Well it only helps (scoring wise) if you DON'T already have some sort of installment loan on your CRs. But being that you have a student loan and an auto loan already, then a personal loan in your case wouldn't help as far as improving your scores. Now, it may help a far as consolidating debt if you have large balances across multiple cards with high interest, but that's a different story.

Re: Question about loans

takeshi74 — Tue, 05 Jan 2016 15:07:26 GMT

@Anonymous wrote:
I was wondering what's the purpose of getting a personal loan? I have 3 major cards, a student loan, and auto loan. I keep seeing on some post that getting a loan will help scores so just wondering.

Scoring really isn't the purpose of a loan though some choose to add a loan for scoring purposes. I advice letting your overall financial needs dictate which credit products you apply for versus letting scoring drive your decision. If your worried about scoing then review your reports, identifiy deficiencies and address them. If those are your FICO 8's then there are probably issues you can work on before worring about adding loans to improve your mix of credit -- that is, if you don't already have one or more installments.

Re: Question about loans

Anonymous — Tue, 05 Jan 2016 15:20:18 GMT

Ok thanks for clearing that up for me! I don't need a loan so I wasn't going to apply, just wanted to understand better as I'm rebuilding. Thanks again!

Re: Question about loans

Anonymous — Tue, 05 Jan 2016 21:28:44 GMT

@OmarGB9 wrote:
Well it only helps (scoring wise) if you DON'T already have some sort of installment loan on your CRs. But being that you have a student loan and an auto loan already, then a personal loan in your case wouldn't help as far as improving your scores. Now, it may help a far as consolidating debt if you have large balances across multiple cards with high interest, but that's a different story.

This is your answer +1. You don't need any more loans if you don't "need" a personal loan.

I fall into the catagory of someone who, although I have had loans, my mortgage and car loans have been paid off so long that they have fallen off my reports. I made the decision not to run out and get a personal loan as is often recommended becasue I am planning on having a new mortgage this year and possibly a car loan. Even without all those things, my clean report with only CC tradelines range between 788 and 792 Fico. My scores with one judgement and still no loans are listed below.

Edited because I noticed you were questioning why loans are needed for rebuilding purposes not so much for yourself. I think it has to do with account mix and getting every last point available, but from what I can see from my own situation you can get a pretty good score without a loan so I'm holding off until I actually need it.