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A few months ago, I told a friend that I wanted to buy a house in about 12 months, so he told me how was my score, and I told him I only had 3 CC's, and that the score was around 680. He told me that even if the score is nice, 3 CC's dont show much Credit Experience, so he told me to get a car, and finance it off course.
So my 2 questions:
1.- Does an installment Account really boosts your credit score?
2.- Does it really makes you look good in front of a home loan company?
Thanks !!!!
Having an installment loan will help. FICO likes to see a mix of different types of credit. Credit mix is 10% of your score.
You may see an initial drop due to new credit but, it should rebound quickly.
It is not a good idea to get anything new when trying to get a mortgage.
To add to what guiness has said I don't think you should ever go into debt just to try and gain a few points on a score. Your main goal should be to get out of debt.
IMO with those three cards you can do just fine. Always pay on time, keep the utilization low, and let all the accounts age.
From a BK years ago to:
EX - 9/09 pulled by lender 802
EQ - 7/06-663, 3/10-800
TU - 8/10-772
You can do the same thing with hard work
Well, I've had the car loan for 3 months now, and I will apply for a home loan in about 6 months, so, you think it will hurt my chances on the home loan? will it help? Or it just depends on the opinion of the lender?
Obviously i have and will keep on doing on time payments.
@memevertical wrote:Well, I've had the car loan for 3 months now, and I will apply for a home loan in about 6 months, so, you think it will hurt my chances on the home loan? will it help? Or it just depends on the opinion of the lender?
Obviously i have and will keep on doing on time payments.
By the time you apply it probably won't matter but only the lender can say for sure.
Good luck with the mortgage application.
From a BK years ago to:
EX - 9/09 pulled by lender 802
EQ - 7/06-663, 3/10-800
TU - 8/10-772
You can do the same thing with hard work
when the car hit your credit report,did your score drop,and if so how much?
I dont remember exactly what was my score back then, but the problem is that the car loan people are only reporting to Equifax, and I dont have access to my real Equifax score, but I would say it dropped between 10 and 15 points.
can get it here thru myfico, google the discount codes. '04 version which most lenders are using...
Hey daboss28, thanks for the help. What do you mean by "'04 version which most lenders are using"?
The fico scoring methods have change every four-six years or so for the past 10-12 years. There were '98 versions which myfico uses for TU. There are the 2004 versions which myfico uses for EQ. The '04 versions of the scoring methods have the lion share of the market. There are also the '08 versions which are starting to catch on. Don't know which lenders are currently using those. So chances are the Eq score here is the same version/score your potential lender will pull. Not 100% becuase I don't know which lenders are currently going with '08.