Better Score help pay down LOC vs. Installment

Anonymous · ‎03-14-2021

Good Morning family,

I'm rebuilding and always want to make my next move by best move. With that said which would be more beneficial to my score, paying down a LOC with a 60% UTI or an installment loan with a 54% UTI?

The LOC is the only credit product with a balance right now which makes my overall UTI 33%

My installment is the only loan history I have, thanks to Wells trying to clear their dirty tracks and wiping my reports, with a UTI of 33%

Any insight would be greatly appreciated. Thanks in advance.

thornback · ‎03-14-2021

Paying the loc would be more beneficial scorewise as revolving util weighs more heavily than installment util. Also, you'd have to pay the installment down to below 8.9% to see a worthwhile score increase. With it being your only installment, for scoring purposes, you should ride the loan out to term because once it's paid off, you'll lose points.

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Anonymous · ‎03-14-2021

^^^ this.

Anonymous · ‎03-14-2021

@thornback wrote:
Paying the loc would be more beneficial scorewise as revolving util weighs more heavily than installment util. Also, you'd have to pay the installment down to below 8.9% to see a worthwhile score increase. With it being your only installment, for scoring purposes, you should ride the loan out to term because once it's paid off, you'll lose points.

Thanks for that straightforward reply. I sometimes get lost in the FICO world language. Much appreciated.

Anonymous · ‎03-14-2021

@Anonymous wrote:
@thornback wrote:
Paying the loc would be more beneficial scorewise as revolving util weighs more heavily than installment util. Also, you'd have to pay the installment down to below 8.9% to see a worthwhile score increase. With it being your only installment, for scoring purposes, you should ride the loan out to term because once it's paid off, you'll lose points.

Thanks for that straightforward reply. I sometimes get lost in the FICO world language. Much appreciated.

+1 to rhe advice above for sure.

Once your installment loan is under 60% util, you get a bump, with of course optimal being under 10% util, but once it's paid it is over, so riding it out since you are already under 60% is a great idea.

Your money is best placed towards any revolving util, which a LOC is included in. In any rehard, revolving util seems to be weighted more heavily than installment utilization. Since your installment loan is at 60%, getting it under 50% util should hopefully give you a nice bump and then work your way down from there.

Thresholds are under: 90%, 70%, 50%, 30%, 10%, but be aware of any added interest and rounding, so say if you hit 49.5%, that would in turn make it 50% for calculations, due to rounding, and you would not cross a threshold for scoring. The same thresholds exist for both individual and aggregate util.

Good luck!

Anonymous · ‎03-14-2021

@Anonymous wrote:
@Anonymous wrote:
@thornback wrote:
Paying the loc would be more beneficial scorewise as revolving util weighs more heavily than installment util. Also, you'd have to pay the installment down to below 8.9% to see a worthwhile score increase. With it being your only installment, for scoring purposes, you should ride the loan out to term because once it's paid off, you'll lose points.

Thanks for that straightforward reply. I sometimes get lost in the FICO world language. Much appreciated.
+1 to rhe advice above for sure.

Once your installment loan is under 60% util, you get a bump, with of course optimal being under 10% util, but once it's paid it is over, so riding it out since you are already under 60% is a great idea.

Your money is best placed towards any revolving util, which a LOC is included in. In any rehard, revolving util seems to be weighted more heavily than installment utilization. Since your installment loan is at 60%, getting it under 50% util should hopefully give you a nice bump and then work your way down from there.

Thresholds are under: 90%, 70%, 50%, 30%, 10%, but be aware of any added interest and rounding, so say if you hit 49.5%, that would in turn make it 50% for calculations, due to rounding, and you would not cross a threshold for scoring. The same thresholds exist for both individual and aggregate util.

Good luck!

Thanks I love this place. I will get LOC under 29% and my installment under 49% doing both wouldn't be cost prohibitive. Hopefully Sir Isaac is in a good mood.

Anonymous · ‎03-14-2021

@Anonymous wrote:
@Anonymous wrote:
@Anonymous wrote:
@thornback wrote:
Paying the loc would be more beneficial scorewise as revolving util weighs more heavily than installment util. Also, you'd have to pay the installment down to below 8.9% to see a worthwhile score increase. With it being your only installment, for scoring purposes, you should ride the loan out to term because once it's paid off, you'll lose points.

Thanks for that straightforward reply. I sometimes get lost in the FICO world language. Much appreciated.
+1 to rhe advice above for sure.

Once your installment loan is under 60% util, you get a bump, with of course optimal being under 10% util, but once it's paid it is over, so riding it out since you are already under 60% is a great idea.

Your money is best placed towards any revolving util, which a LOC is included in. In any rehard, revolving util seems to be weighted more heavily than installment utilization. Since your installment loan is at 60%, getting it under 50% util should hopefully give you a nice bump and then work your way down from there.

Thresholds are under: 90%, 70%, 50%, 30%, 10%, but be aware of any added interest and rounding, so say if you hit 49.5%, that would in turn make it 50% for calculations, due to rounding, and you would not cross a threshold for scoring. The same thresholds exist for both individual and aggregate util.

Good luck!
Thanks I love this place. I will get LOC under 29% and my installment under 49% doing both wouldn't be cost prohibitive. Hopefully Sir Isaac is in a good mood.

Just to be clear, bringing down the balance on the installment loan does nothing score-wise unless you go all the way down under 10%, and which once it is paid off, mamy have had major loss of points with their only open, low util installment loan closing. I wouldn't be too eager to pay it off, esoecially since it is already under 60%.

In case I did not mention, those thresholds are only for revolving utilization (including lines of credit). For installment utilization, there are only 2 well known thresholds, that we outlined above, under: 60% and 10%. Those are the only 2. I would put most stock into reducing revolving types of util.

Good luck!

Anonymous · ‎03-14-2021

@Anonymous wrote:
@Anonymous wrote:
@Anonymous wrote:
@Anonymous wrote:
@thornback wrote:
Paying the loc would be more beneficial scorewise as revolving util weighs more heavily than installment util. Also, you'd have to pay the installment down to below 8.9% to see a worthwhile score increase. With it being your only installment, for scoring purposes, you should ride the loan out to term because once it's paid off, you'll lose points.

Thanks for that straightforward reply. I sometimes get lost in the FICO world language. Much appreciated.
+1 to rhe advice above for sure.

Once your installment loan is under 60% util, you get a bump, with of course optimal being under 10% util, but once it's paid it is over, so riding it out since you are already under 60% is a great idea.

Your money is best placed towards any revolving util, which a LOC is included in. In any rehard, revolving util seems to be weighted more heavily than installment utilization. Since your installment loan is at 60%, getting it under 50% util should hopefully give you a nice bump and then work your way down from there.

Thresholds are under: 90%, 70%, 50%, 30%, 10%, but be aware of any added interest and rounding, so say if you hit 49.5%, that would in turn make it 50% for calculations, due to rounding, and you would not cross a threshold for scoring. The same thresholds exist for both individual and aggregate util.

Good luck!
Thanks I love this place. I will get LOC under 29% and my installment under 49% doing both wouldn't be cost prohibitive. Hopefully Sir Isaac is in a good mood.
Just to be clear, bringing down the balance on the installment loan does nothing score-wise unless you go all the way down under 10%, and which once it is paid off, mamy have had major loss of points with their only open, low util installment loan closing. I wouldn't be too eager to pay it off, esoecially since it is already under 60%.

In case I did not mention, those thresholds are only for revolving utilization (including lines of credit). For installment utilization, there are only 2 well known thresholds, that we outlined above, under: 60% and 10%. Those are the only 2. I would put most stock into reducing revolving types of util.

Good luck!

Thanks it's clear now. I will leave the installment alone and just ride it out.

Anonymous · ‎03-15-2021

@Anonymous Quick question, I just pulled my 3B and my installment loan hasn't been reported since Dec so I am technically not under that 60% threshold. I spoke to the bank and they said they will push an update on the 1st. How many points am I looking to gain from this? Any help would be greatly appreciated.

Thanks