@TravelNut wrote:My wife only has revolving debt accounts since her car loan was paid off and dropped off her file.
I just opened a AmEx Personal Loan for her to get some points from a credit mix perspective and was wondering what the utilization thresholds are for Personal Loans?
I seem to remember that somebody had a data point that when their balance on installment loan went under 55% there was a good bump in points?
The only significant bump is when aggregate installment loan utilization percentage gets down to 9% or thereabouts.
She didn't need a new loan for "credit mix". That's covered by closed loans.
There is, however, a penalty for no open loans.
@TravelNut wrote:
@SouthJamaica wrote:
@TravelNut wrote:My wife only has revolving debt accounts since her car loan was paid off and dropped off her file.
I just opened a AmEx Personal Loan for her to get some points from a credit mix perspective and was wondering what the utilization thresholds are for Personal Loans?
I seem to remember that somebody had a data point that when their balance on installment loan went under 55% there was a good bump in points?
The only significant bump is when aggregate installment loan utilization percentage gets down to 9% or thereabouts.
She didn't need a new loan for "credit mix". That's covered by closed loans.
There is, however, a penalty for no open loans.
@SouthJamaica The auto loan she had was paid off 12 yrs ago and has now dropped off her credit file all togethrr with no evidence of it at all with any CRA so I assume she is not getting the credit mix points. Yes intially there will be a hit to her credit due to AAOA hit but that hit will go away after a year since she has a super clean file and she did not get a hard pull becasue it was with AmEx where they gave her the PL on a Soft Pull. I plan to pay it down to 8% right away to get those points too
Agreed if the only installment loan has dropped off her reports, you're right that she would need the new one to satisfy installment loan component of credit mix. The point loss for adding the account probably outweighs the point gain by satisfying credit mix, though.
Yeah if you do pre-pay it down to 8% right away she'll be fine in her FICO 8's and 9's. I don't know if Amex will let her keep the loan open for a long time, though, or will accelerate the payment due dates upon prepayment.
@CH-7-Mission-Accomplished wrote:
@SouthJamaica wrote:
@TravelNut wrote:My wife only has revolving debt accounts since her car loan was paid off and dropped off her file.
I just opened a AmEx Personal Loan for her to get some points from a credit mix perspective and was wondering what the utilization thresholds are for Personal Loans?
I seem to remember that somebody had a data point that when their balance on installment loan went under 55% there was a good bump in points?
The only significant bump is when aggregate installment loan utilization percentage gets down to 9% or thereabouts.
She didn't need a new loan for "credit mix". That's covered by closed loans.
There is, however, a penalty for no open loans.
Since the points bonus is based on the aggregate installment utilization dropping below 9%, does this mean that anyone with, say, a 30-year mortgage or student loans that are only paid down 20% would not gain any points when their auto loan falls below 9%?
There might be slight increments. But in my case when I was down to 14% I was still getting a negative reason code that the balance was too high. Only when I got to 9% did I get my big bang.
I don't know if a mortgage is going to be treated differently, though; I have no experience with those in FICO land.
@TravelNut wrote:My wife only has revolving debt accounts since her car loan was paid off and dropped off her file.
I just opened a AmEx Personal Loan for her to get some points from a credit mix perspective and was wondering what the utilization thresholds are for Personal Loans?
I seem to remember that somebody had a data point that when their balance on installment loan went under 55% there was a good bump in points?
Two things: why are *you* opening accounts for your wife? Is she incapacitated or something? Just wondering, because women historically have not managed credit, then ended up lost when their husband died or left. I'm curious why she isn't dealing with her own credit.
Two, and this will get lots of backlash!, having a loan is *not* necessary for a good credit score. I mean 'good' as in EXCEPTIONAL, like mine. I never have loans, and my scores are always in the 800s. I recently took an Amex offer for a low-APR loan just for the hell of it, to do my own research on how or if it ultimately affects my scores. But, normally, I have nothing but credit cards and I'm fine. This whole 'you MUST have an installment loan for a good credit mix!' is simply not true. Or else I'm some kind of anomaly. 
@SoCalGardener wrote:
@TravelNut wrote:My wife only has revolving debt accounts since her car loan was paid off and dropped off her file.
I just opened aAmExx Personal Loan for her to get some points from a credit mix perspective and was wondering what the utilization thresholds are for Personal Loans?
I seem to remember that somebody had a data point that when their balance on installment loan went under 55% there was a good bump in points?
Two things: why are *you* opening accounts for your wife? Is she incapacitated or something? Just wondering, because women historically have not managed credit, then ended up lost when their husband died or left. I'm curious why she isn't dealing with her own credit.
Two, and this will get lots of backlash!, having a loan is *not* necessary for a good credit score. I mean 'good' as in EXCEPTIONAL, like mine. I never have loans, and my scores are always in the800ss. I recently took anAmexx offer for a low-APR loan just for the hell of it, to do my own research on how or if it ultimately affects my scores. But, normally, I have nothing but credit cards and I'm fine. This whole 'you MUST have an installment loan for a good credit mix!' is simply not true. Or else I'm some kind of anomaly.
SoCalGardenerr I've gotten my wife and i from the high 500's to the high 700's in 2 yrs and have shown her how I've done it every step of the way. I have traditionally managed our money and credit and am always very transparent in what I'm doing and why. She manages the house and shows me from time to time how to run the Washer/Dryer and vacuum incase she kicks off and I'm left to my own devices. So it has worked well the last 20 yrs
On your second point, she has been stuck in the 770's to 780's acrosss the board for like 12 months and the only thing I could see is that she only has revolving debt on her file and nothing else so I thought I would try this and see what happens over the next year.
@TravelNut wrote:
@SoCalGardener wrote:
@TravelNut wrote:My wife only has revolving debt accounts since her car loan was paid off and dropped off her file.
I just opened aAmExx Personal Loan for her to get some points from a credit mix perspective and was wondering what the utilization thresholds are for Personal Loans?
I seem to remember that somebody had a data point that when their balance on installment loan went under 55% there was a good bump in points?
Two things: why are *you* opening accounts for your wife? Is she incapacitated or something? Just wondering, because women historically have not managed credit, then ended up lost when their husband died or left. I'm curious why she isn't dealing with her own credit.
Two, and this will get lots of backlash!, having a loan is *not* necessary for a good credit score. I mean 'good' as in EXCEPTIONAL, like mine. I never have loans, and my scores are always in the800ss. I recently took anAmexx offer for a low-APR loan just for the hell of it, to do my own research on how or if it ultimately affects my scores. But, normally, I have nothing but credit cards and I'm fine. This whole 'you MUST have an installment loan for a good credit mix!' is simply not true. Or else I'm some kind of anomaly.
SoCalGardenerr I've gotten my wife and i from the high 500's to the high 700's in 2 yrs and have shown her how I've done it every step of the way. I have traditionally managed our money and credit and am always very transparent in what I'm doing and why. She manages the house and shows me from time to time how to run the Washer/Dryer and vacuum incase she kicks off and I'm left to my own devices. So it has worked well the last 20 yrs
On your second point, she has been stuck in the 770's to 780's acrosss the board for like 12 months and the only thing I could see is that she only has revolving debt on her file and nothing else so I thought I would try this and see what happens over the next year.
It is possible to have an 850 score without any installment loans, open or closed, in one's portfolio.
So if the only reason for the loan is to improve her scores, I would skip it. (I forgot, you already took out the loan. So the main thing now is to pay it down to 9%, and hope you can keep it open for a good long time).
The passage of time + no new applications + no new accounts = score growth.