Hi all! Can someone tell me whether an auto (installment) loan is good for my score or not please? I know that I will be dinged for the inquiries (I used 2), but am I dinged also for the new TL/new credit extension? It doesn't matter because I need a new car (mine died Monday morning
), but I want to know. Thanks!
@adavis425 wrote:Hi all! Can someone tell me whether an auto (installment) loan is good for my score or not please? I know that I will be dinged for the inquiries (I used 2), but am I dinged also for the new TL/new credit extension? It doesn't matter because I need a new car (mine died Monday morning
Do you already have an installment loan showing on your credit reports ? Adding a new installment loan won't do much for your FICO score unless it adds to your mix of credit...i.e. your first installment loan. And obviously there is some short term ding associated with the inquiries and a lower AAoA.
@pizzadude wrote:
@adavis425 wrote:Hi all! Can someone tell me whether an auto (installment) loan is good for my score or not please? I know that I will be dinged for the inquiries (I used 2), but am I dinged also for the new TL/new credit extension? It doesn't matter because I need a new car (mine died Monday morning
Do you already have an installment loan showing on your credit reports ? Adding a new installment loan won't do much for your FICO score unless it adds to your mix of credit...i.e. your first installment loan. And obviously there is some short term ding associated with the inquiries and a lower AAoA.
No, I don't. This would be my very first installment loan, but I read on my USAA credit report summary that the fact that I did not have an ins loan was helping my score. Not so? I guess I'll have to wait and see as I don't have any choice but to buy a car. Thanks Pizzadude.
@adavis425 wrote:
@pizzadude wrote:
@adavis425 wrote:Hi all! Can someone tell me whether an auto (installment) loan is good for my score or not please? I know that I will be dinged for the inquiries (I used 2), but am I dinged also for the new TL/new credit extension? It doesn't matter because I need a new car (mine died Monday morning
Do you already have an installment loan showing on your credit reports ? Adding a new installment loan won't do much for your FICO score unless it adds to your mix of credit...i.e. your first installment loan. And obviously there is some short term ding associated with the inquiries and a lower AAoA.No, I don't. This would be my very first installment loan, but I read on my USAA credit report summary that the fact that I did not have an ins loan was helping my score. Not so? I guess I'll have to wait and see as I don't have any choice but to buy a car. Thanks Pizzadude.
Your mix of credit isn't a huge component of your FICO score but it helps to have both installment and revolving accounts.
Most of the scoring advice from non~FICO websites is useless, and sometimes following it will actually lower your FICO score.
Good luck with your car buying ~ I would recommend looking around this section, Auto Loans, there is a tremendous amount of good info here on the car buying process.