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Is installment loan important if I have mortgage?

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imandy
Valued Member

Is installment loan important if I have mortgage?

So I still consider myself rebuilding I'm currently 720 with a new mortgage that started reporting in October. (BK 2005) I have not had any Installment loans (car loans etc) since 2010 as I just have had no need for one.

 

I am in the process of buing a new car again with cash but was wondering would there be any benefit to maybe financing $10k or some small amount to show that I have an installment loan, or beause I have a mortgage is it not really necessary to show installment debt for FICO scoring if you already have a mortgage?

 

I'm thinking it might actually hurt my scores showing more debt versus another positive TL.  FYI I have plenty of credit cards and decent AAoA so that's not an issue either.

 

Looking for thoughts...thanks!

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rckstrscott
Valued Contributor

Re: Is installment loan important if I have mortgage?


@imandy wrote:

So I still consider myself rebuilding I'm currently 720 with a new mortgage that started reporting in October. (BK 2005) I have not had any Installment loans (car loans etc) since 2010 as I just have had no need for one.

 

I am in the process of buing a new car again with cash but was wondering would there be any benefit to maybe financing $10k or some small amount to show that I have an installment loan, or beause I have a mortgage is it not really necessary to show installment debt for FICO scoring if you already have a mortgage?

 

I'm thinking it might actually hurt my scores showing more debt versus another positive TL.  FYI I have plenty of credit cards and decent AAoA so that's not an issue either.

 

Looking for thoughts...thanks!


Installment loans are a peice.. if you don't have one, then yes, your score mix isn't ideal..

 

However, it's not a huge deal, if you have a mortgage, revolving ect you have plenty of positive factors.. but I could see an installment loan helping a little..

 

-scott

Starting FICO Score: October 2010: TU 498 | EQ: 502
Current FICO Scores:: May 2022: TU: 784 | EQ: 770 | EX: 790
Message 2 of 3
Shogun
Moderator Emeritus

Re: Is installment loan important if I have mortgage?

Not worth paying the interest for a point or two.  

Starting Score: 504
July 2013 score:
EQ FICO 819, TU08 778, EX "806 lender pull 07/26/2013
Goal Score: All Scores 760+, Newest goal 800+
Take the myFICO Fitness Challenge

Current scores after adding $81K in CLs and 2 new cars since July 2013
EQ:809 TU 777 EX 790 Now it's just garden time!

June 2017 update: All scores over 820, just pure gardening now.
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