Hi, I am working on my credit; my scores are 672, 672 and 731 (Fico Score 8). Thing is, this doesn't reflect my financial reality; I make a lot of money, have a lot of money in the bank, don't have much need for credit, which I guess is one of the reasons my scores are low? I made one late payment 6 years ago, and I have one collection which is legitimate because I forgot to return my cable modem when I moved a couple of years ago and apparently they couldn't get ahold of me. I paid it as soon as I found out of course, but not much I can do about that now. I only have one credit card from AmEX (a Blue Cash) because I use my Platinum (revolving) for most stuff and they won't increase the limit on my Blue Cash because they say I don't have good enough credit. I've been told that I should have an auto loan (I should mention I don't have a mortgage or a student loan). I have been considering buying a new gas scooter, total purchase price about $4000. I'm considering getting a loan for it, even though I don't actually need a loan, just to get my score up, and making the term 5 years or whatever just so I can show I'm making the payments. Is the increase from having that loan greater than the hit I would take for applying for it? Will I get dinged because that $4000 will look like a big proportion of my credit? And is that even bad? Also while I'm at it, should I get another credit card? Again, I honestly don't need it, but I will if it improves my credit. So many questions. 
@Anonymous wrote:Hi, I am working on my credit; my scores are 672, 672 and 731 (Fico Score 8). ... I've been told that I should have an auto loan (I should mention I don't have a mortgage or a student loan). I have been considering buying a new gas scooter, total purchase price about $4000. I'm considering getting a loan for it, even though I don't actually need a loan, just to get my score up, and making the term 5 years or whatever just so I can show I'm making the payments. Is the increase from having that loan greater than the hit I would take for applying for it? Will I get dinged because that $4000 will look like a big proportion of my credit? And is that even bad? Also while I'm at it, should I get another credit card? Again, I honestly don't need it, but I will if it improves my credit. So many questions.
It would be generally correct to say that credit scores have little to do with financial health, and are predominantly about payment history and lender risk.
Having an installment loan will make a significant impact on the Credit Mix portion of the FICO scoring models, if it is actively being paid and is of a low risk type, such as an auto loan. In order to gain the greatest reward from having an installment loan on your record, it should be an active account that has current payments, and it should have a remaining balance of 8.9% or less of the original loan amount. If the loan terms allow you to maintain the full 5 year payment cycle and pre-pay the balance down to a very low percentage very soon after you get it, this will result in a scoring boost that you can maintain. If pre-paying is not allowed, you end up paying significant amounts of interest, and if the following months minimum payment due does not get reduced to zero for pre-payment or the life of the loan is shortened by pre-payment, the usefulness of the loan for boosting your scores will be very brief.
As was mentioned above, there are other loan types that allow this type of payment manipulation, and you can count on the terms being favorable for this purpose. Secured credit builder type loans from a credit union are usually used for this purpose, but it may be possible that a small auto loan can do the same for you, if it is actualy classified as an auto loan, and the payment terms allow the majority of the balance to be paid right away, but the length of the loan is maintained. With these terms, you should see a ~30 point boost to your FICO scores for the life of that loan.
As for the number of revolving accounts, if you have two revolving (card) accounts already, adding a third one will help slightly, but the main function of having 3 or more revolving accounts is to allow balances on one account without receiving a 'penalty' to your score. For example if you have two, and one has a balance, half or more of your accounts have a balance and you will lose points --- but, with three accounts, you are able to allow a small amount (<8.9% utilization) show up on one account while the other two show zero balance and you will actually receive a modest increase to your score (commonly referred to as AZEO, "all zero except one"). Similarly if you want to be able to maintain a balance on two accounts, you will need 5 to avoid this "half or more" 'penalty'. I am not advocating paying interest, just allowing a small quantity to be reported so creditors can see that you are using availalable credit -- it should always be paid in full to avoid interest, it is merely helpful to allow a short term balance to show up on a monthly statement.
