Effect of absence of installment loan info on credit report.

[Anonymous]

From what i've read so far not having a loan reporting cost you a few points on your "general" fico score but i was wondering whether what  impact does it have on industry specific scores and the lending decisions associated with them.

For example you have a 2 year credit history with perfect payments and utilization AAoA 1 year or so and 3-4 cards reporting which probably nets you a general score north of 750 and you want to finance a car. Will you be able to get the best APR or at least close to? 

If anyone has any experience with applying for your first loan(any kind not just auto) with a good score accumulated from card activity only i'd like to share their experiences with me

[Anonymous]

Great question.  First off it would probably make sense to describe how all those scores are grouped together.

Every 4-6 years a big "family" of models is released.  Here are some examples:

      * In 1998, the FICO 98 family was released.

      * In 2004, the FICO 04 family was released.

      * In 2008, the FICO 08 family was released.  (Later named FICO 8)

      * In 2014, the FICO  9 family was released.

Each  family has three flavors: Classic, Auto, Bankcard Enhanced.  The Classic model is released first followed up in a year or so by the Auto and BE flavors.

All FICO models give you some scoring points for having an installment account (closed or open).

Some FICO families give you additional points for having at least one open loan, where your open installment debt is mostly but not entirely paid off.  FICO 8 is like that.  Exhaustive testing has not proven that FICO 8 BE and FICO 8 Auto behave in a similar way, though I'd personally be very surprised if they don't.

The Auto flavors in all families have in common that they give you some scoring points for having auto loans in good standing -- not clear to me if these need to be open.

Now to address your specific question: Yes you can get approved and with best rates from some lenders with no installment accounts (closed or open) on your report.  A score of 750+ would be sufficient.

Some lenders might have additional internal policies (like giving preference to people who have a loan on their reports, or people with an Age of Oldest Account of 2+ years, or an AAoA of 2+ years or few new credit cards opened recently or whatever).  But it is certainly possible to get best rates with the profile you describe from someone.

PS.  Bear in mind that some auto lenders use the Classic flavor rather than Auto Enhanced.