topic Re: Additional Installment Loan Question... in Mortgage Loans

Additional Installment Loan Question...

Andy77 — Sun, 24 Feb 2008 22:14:49 GMT

I have an an auto loan with BofA and I just got a second installment loan loan for 10k to consolidate debt.

Will just the mere fact of having a second installment loan on my CR make my Fico score go up?

Message Edited by Andy77 on 02-24-2008 02:14 PM

Re: Additional Installment Loan Question...

fused — Sun, 24 Feb 2008 22:44:47 GMT

Probably no. If anything, I would expect little change or possibly a small ding to your scores.

Re: Additional Installment Loan Question...

Andy77 — Sun, 24 Feb 2008 22:46:33 GMT

Interesting...why is that?

I thought Installment Loans were more so favored then credit cards..etc....

Re: Additional Installment Loan Question...

sunrise — Sun, 24 Feb 2008 23:02:48 GMT

the extra inquiry and extra debt may cause a ding.....but, it should go back up after a few payments have posted.

Re: Additional Installment Loan Question...

Andy77 — Sun, 24 Feb 2008 23:12:46 GMT

well I applied for a personal unsecured loan with 5 lenders over two days...2/21 & 2/22...so that's 5 inquiries.

My score did not change because of those inquiries, but It went down 45 points for high utilization of avail credit ...from 698 to 653.

Re: Additional Installment Loan Question...

fused — Sun, 24 Feb 2008 23:14:34 GMT

Andy77 wrote:

Interesting...why is that?

I thought Installment Loans were more so favored then credit cards..etc....

Well it's a bit complicated...everything about FICO scoring is. Credit cards and other revolving trade line utilization calculations carry considerably more weight in FICO scoring than do installment util calculations. If, on the other hand you have high CC debt and pay off a bunch of it, this will surely improve your scores. Here's what could cause your scores to drop some with this new loan.

- a new account re-aging your credit files; this shortens the average-age of your accounts

- a new inquiry may or may not hurt you

Re: Additional Installment Loan Question...

Andy77 — Sun, 24 Feb 2008 23:20:28 GMT

Well, do you think that since my cc utilization will go from 95% to 9.2% after I consolidate to this loan, do you think I score increase from 653, where I am currently, to somewhere in the 700's is unreasonable?

Re: Additional Installment Loan Question...

fused — Sun, 24 Feb 2008 23:26:10 GMT

Andy77 wrote:

Well, do you think that since my cc utilization will go from 95% to 9.2% after I consolidate to this loan, do you think I score increase from 653, where I am currently, to somewhere in the 700's is unreasonable?

Just a couple of questions before I try to answer this. Do you have any bad stuff on your reports (other than the Amex stuff you mentioned in another thread). If yes, what are they and when did they happen. How many inqs on each report? Your util numbers above, is this overall and individual util?

Re: Additional Installment Loan Question...

Andy77 — Sun, 24 Feb 2008 23:36:37 GMT

I have a collection that is due to fall off of my EQ report next month. It has been removed from the other two CR's. I have a BofA credit card from 01' that is 120 days late that is removed from TU but still on my EQ and EP reports. I disputed this on EP, but waiting on results This is due to fall off in April.

The highest my score has been with the derogetory marks was 702 that was in july of 07, but at that time, I had not cc debt, whereas now I am just taking my debt and moving it to the personal loan.

I am thnking since the derogs are going to fall off very soon they weigh less and my score could not go higher then 702

I have six inquires on EQ, twelve on EP, six on TU

Re: Additional Installment Loan Question...

fused — Sun, 24 Feb 2008 23:47:46 GMT

If both your individual (on each CC) and overall utilization comes down to 9.20%, I think you might very well hit the 700 club (or at least come very close). These old baddies falling off will give you some points too. In the future have less than half of your revolving accounts reporting any balance...keep the rest of your revolving balances at 1-9%.

Re: Additional Installment Loan Question...

Andy77 — Sun, 24 Feb 2008 23:51:26 GMT

Yeah, thanks for that advice...how is overall utilization figured...

I have a 35k car loan and will have this loan for 10k

do I figure in those or just credit cards?

Re: Additional Installment Loan Question...

fused — Sun, 24 Feb 2008 23:58:40 GMT

Only concern yourself with the revolving utilization, leave the loans. Here's an illustration:

CC A: CL 5K/balance 2K = 40% util (this is indvidual util)

CC B: CL 4K/balance 1K = 25% util (this is indvidual util)

CC C: CL 8K/balance 3K = 38% util (this is indvidual util)

Total available Credit = 17K

Overall util is 17K/6K = 35.20%

Re: Additional Installment Loan Question...

Andy77 — Mon, 25 Feb 2008 00:06:02 GMT

I think I am good shape:

Cap One CL: 4100 Bal:50.00

Orchard Bank CL 2200 Bal 0

Dell CL 2500 Bal 0

First Premier CL 1000 Bal 800.00 - moving this to Orchard to bring down utilization and ratio

Chevron CL 1000 Bal 432.00

Exxon CL 850 Bal 0

Shell 750 Bal 0

BofA CL 800 Bal 0

Re: Additional Installment Loan Question...

fused — Mon, 25 Feb 2008 01:01:37 GMT

Looks good!