I plan on applying for an auto loan in about a year however I have absoluetely no installment loan history, just cc's. My Fico auto scores are in the 680-700 range, will a personal loan paid down in a year help auto scores a great deal?
Gardening until September 2025
Good link. When you get it down to about 9%, if I recall, you can get maximum scoring on Fico 8. However, if you pay it all off, and go back to no installments, you can lose points.
@Discover2016 wrote:I plan on applying for an auto loan in about a year however I have absoluetely no installment loan history, just cc's. My Fico auto scores are in the 680-700 range, will a personal loan paid down in a year help auto scores a great deal?
Short answer is yes when talking FICO 8, longer answer is there's been a lot of discussion over the years of "first time buyer" penalty (lack of installment history) regarding the Auto industry option... it's been such a common thing over time to be sort of fact.
So yeah, go do this, share secured loan trick as linked.
Really everyone without installment history should in my opinion as it's leaving points on the table if you don't and doesn't cost hardly anything. For reference FICO 8 and associated industry options for me was around 20-25 points and I already had closed installment loans too so in theory I had credit mix and had dumped the first time buyer penalty years ago.
Method:
http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Adding-an-installment-loan-the-Share-Secu...
Gory Theory:
http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Installment-tradeline-utilization-thread/...
@RM21 wrote:
Good link. When you get it down to about 9%, if I recall, you can get maximum scoring on Fico 8. However, if you pay it all off, and go back to no installments, you can lose points.
Yeah, like this:
@Discover2016 wrote:I plan on applying for an auto loan in about a year however I have absoluetely no installment loan history, just cc's. My Fico auto scores are in the 680-700 range, will a personal loan paid down in a year help auto scores a great deal?
My profile, like yours, had no open installment loans.
Here's what happened to my Auto 8 scores when I took out a share secured loan, and let it first report at 15%.
EQ -4 TU +-0 EX -7
Then when I paid it down to 9%:
EQ +23 TU +22 EX +28
So overall there were net gains of 19, 22, and 21 points respectively for taking out a small share secured loan and paying it down to 9%.
So I would say you have a good shot at adding some points to your Auto 8 scores by playing the "reindeer game".
