One of my free FAKO scores lists "having three or more installment loans" as something that hurts my credit. To make a long story short, my student loans report as one for each year to give me a total of six installment loans (four years undergrad, two years grad school).
Is this the sort of thing that genuinely hurts my score, or is it something that's listed more for entertainment purposes or otherwise without merit. I'm reluctant to consolidate these just to get rid of this ding, especially since these are my oldest accounts and I'm afraid that doing so would hurt my AAoA more than it would help by diminishing the installment loans.
Thoughts?
Starting Score: 578 (3/11/13)
It is nothing to be concerned about, FAKOs love to spread mis info. While you would lose points for a recent instalment loan you do recover them as you continue to make payments and the accounts age. When you pay off all your instalment loans is when you tend to lose 10-15 points for awhile as your profile adjusts.
@gdale6 wrote:It is nothing to be concerned about, FAKOs love to spread mis info. While you would lose points for a recent instalment loan you do recover them as you continue to make payments and the accounts age. When you pay off all your instalment loans is when you tend to lose 10-15 points for awhile as your profile adjusts.
Thanks for the confirmation. GIven the interest rate and the age, i think i'll pay off the lower dollar "subsets" more quickly (something I want to do broadly anyway to lower my overall debt) but hold on for dear life to the oldest two since they're my oldest by leaps and bounds.
@DrZoiberg wrote:I have a 705+ score and I have 22 installment loans. 21 are student loans and 1 is a car loan. Hasn't hurt my credit score but I do have a crappy debt to income ration.
Good to know. In the name of realism I'm only shooting for the 700s at present, so if 22 can get there, I can't imagine 6 would be *the* thing keeping me from doing so. Thanks for the reply.