Credit Mix - No Open Loans

[Anonymous]

Next month I'll be making my last payment on my one open loan.  I also have two, both closed and derogatory, installment accounts on my CRs (one paid that I'm trying to get removed and another that should fall off any day).

I'm curious about whether paying off my only open loan will negatively effect my "mix of credit" in FICO's eyes?  (Also, what about if the other two derog/closed installment accounts come off reports?)

Do the FICO powers that be want to see an open installment account?  If so, what are my best options since a mortgage won't be in the works for another year or two (probably even further out than that)?

Thank you!

[pizzadude]

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@Anonymous wrote:

Next month I'll be making my last payment on my one open loan.  I also have two, both closed and derogatory, installment accounts on my CRs (one paid that I'm trying to get removed and another that should fall off any day).

I'm curious about whether paying off my only open loan will negatively effect my "mix of credit" in FICO's eyes?  (Also, what about if the other two derog/closed installment accounts come off reports?)

Do the FICO powers that be want to see an open installment account?  If so, what are my best options since a mortgage won't be in the works for another year or two (probably even further out than that)?

Thank you!

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Even when the account is closed it will still add positively towards your mix of credit.    From a FICO perspective you can certainly be a "high~achiever" without a mortgage or car loan.      I wouldn't advise going out an getting an installment loan to always have one open, you don't really need it.

When your negative accounts age off or turn positive I would expect to see some improvement in your FICO score.

[Anonymous]

Excellent!  Thanks Pizza, that's exactly what I was looking for  I'd read a few threads that made it sound like having only closed installment accounts was a bad thing - glad to know it's not though!

I certainly didn't want to have to go look for some random loan just for the sake of having one - although I could have used it to pay down DF's tragically high utilization lol

[pizzadude]

That's actually a very good reason to take out a loan ~ if you can pay down revolving debt with an installment loan you should get a FICO boost from the reduction in credit card debt, and also hopefully save some $$$ in interest as well.

[Anonymous]

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@pizzadude wrote:

That's actually a very good reason to take out a loan ~ if you can pay down revolving debt with an installment loan you should get a FICO boost from the reduction in credit card debt, and also hopefully save some $$$ in interest as well.

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It's something I've been toying with doing for a while.  I don't think taking out a loan would be too damaging to my scores since my AAoA is already going to drop this year when bad accounts fall off and a slew of new revolving accounts report.  It'll be going from about 5 years to 2.5...

I'd take it out under my name, to pay down his util (his TU is already hovering around 700 with 70%+ util) and then have him add me as an AU to his 10 year old Cap1 to help with my soon to be trashed AAoA.  The only negative on the Cap1 (or anywhere on his CR for that matter) is a 2.5 year old 30 day late which makes me a little hesitant since I haven't had any lates in 5 years, I worry about that outweighing the AAoA benefit.

Confused yet? lol

It sounds like a lot of work, but I think it would probably be worth it in the end - even if I didn't have him add me as an AU after...  Would you happen to know where would one go online to look into a loan?  Would Prosper be a place to consider or are there better options?

[pizzadude]

Sounds like a good idea to me ~ getting his util down from 70% should certainly help his scores.    And if you get added as AU to the 10+ year old Cap1 it should help your AAoA, although I don't know how much that 30 day late will hurt.    Have you tried sending a GW request to ask them to remove it ?   Sometimes creditors will do this as a one time gesture if you have otherwise clean payment history.

Propser is probably a good place to look.   Also do you have any relationships with any local CUs or banks ?  They might be able to help as well.   

[Anonymous]

He's spent hours on the phone with the "back door" numbers from the back door thread on CC board with no luck.  I'm not even sure those back door numbers really are anything special with Cap1 since it takes him 3+ transfers just to get to someone who actually understands that he is calling about a 2.5 year old late and is not currently late... So, yes he's tried, but no he's had no luck lol  The best he's gotten is one of them to dispute it in their system, since he doesn't remember being late - but it came back verified.

I took a look at Prosper and updated all my info but no luck, instant denial although they emailed me saying I have an Ex Scorex Plus of 680.  A little disappointing, I thought a 680 might have been good enough for a small $2-3k loan but I guess not.

Neither of us bank with a CU.  I bank with BofA but I doubt they'd give me a personal loan based on how they've treated my CC account with them.  I may dump them next year since there are no branches in my area and I'm bitter about my 4 year old BofA card that they refuse to raise above $800 (been sitting there for 3 years and they won't nix the AF either).  I can't even find anything on the BofA site about personal loans specifically, although they have loads of types of loans listed.

I don't even think that there is a CU in our immediate area (small town).  I just opened a Southwest CC with Chase this month and I just got approved for a Discover More yesterday - but no history with either of them to use as leverage to get a loan so soon after opening new accounts with them.

[MarineVietVet]

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@pizzadude wrote:

Even when the account is closed it will still add positively towards your mix of credit.    From a FICO perspective you can certainly be a "high~achiever" without a mortgage or car loan.      I wouldn't advise going out an getting an installment loan to always have one open, you don't really need it.

When your negative accounts age off or turn positive I would expect to see some improvement in your FICO score.

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Ditto to this. Closed accounts are still factored into your credit mix although open, active accounts are weighed a bit more heavily.