@Anonymous wrote:
Why does this only work if you don't already have an open installment loan? Wouldn't it bring down your installment utilization regardless?
Paying off less than $500 on an installment loan is unlikely to bring the total sum of all your installment loan "utilizations" down to below 10%. And that is apparently where you get the majority of the benefit on FICO 08 and 08 Bankcard scores.
In other words, you could just pay down your existing installment loan instead. But unless you can get it paid way way down, you don't gain most of the benefits. And once its paid down, the loan probably won't stay open very long due to required minimum monthly payments. The feature of the Alliant loan where paying in advance doesnt shorten the length of the loan, is one reason why this works.
