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Closed Installment Loan with a Balance

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KatieKatie
Regular Contributor

Closed Installment Loan with a Balance

Hi, I just noticed that one of my installment loans is listed as "closed", although there is still a balance on the account, that I am regularly paying and I have never experienced any delinquency.  It looks odd as all my other installment loans are reporting as open.  Is this impacting my score at all?  I could have the creditor in question update this to reflect that it is open, but didn't want to go through the trouble if it's not having an impact.  

Message 1 of 6
5 REPLIES 5
RobertEG
Legendary Contributor

Re: Closed Installment Loan with a Balance

Installment loans should not normally report as closed if there is still a balance due.

Only revolving accounts are closed with a balance, as it is a means to prevent the consumer from adding new charges.

Installment loans have a set principal loan amount that cannot unilaterally be increased by the consumer, and thus need not be "closed" by the lendor in order to prevent additional charges/increased debt.

 

I would contact the lendor and inquire as to why it has been updated to closed.

 

Message 2 of 6
KatieKatie
Regular Contributor

Re: Closed Installment Loan with a Balance

Thanks Robert. Is there any way to know if this is impacting my score? I will contact them to be on the safe side.
Message 3 of 6
Anonymous
Not applicable

Re: Closed Installment Loan with a Balance

I guess it would depend if the original balance on the loan was still being considered.  Like if it was a $10k loan and your current balance is $500, you're at 5% utilization.  So long as the $10k original balance is still being considered in the equation, you're fine.  If the $10k original balance is being considered as $0, that would mean instead of 5% utilization you'd be at 100% utilization.  Very different.  I doubt this is the case though, since installement loans are very different than revolvers. 

 

Did this recently report as closed or has it been that way for some time?  When it first happened, did you notice any change at all to your FICO scores?

Message 4 of 6
KatieKatie
Regular Contributor

Re: Closed Installment Loan with a Balance

I am honestly not sure when it closed.  I have a report from 2016 and it was reporting as open; however, I went back and took a look at a report from January, 2018 and it was reporting as closed at that time.   Current utilization on the loan should be about 64%.  My suspicion is that when we paid off a mortgage loan around July, 2017, with this same financial institution (regional credit union), they somehow incorrectly reported this account as closed, and they also managed to delete the mortgage line and history altogether from all credit bureaus.  Getting them to add that history back took the better part of a year.

 

I am hesitant to dispute it because we will seek a mortgage within the next 30-60 days and I don't want to deal with dispute comments causing any type of unnecessary delay.  My experience with the CUs ability to report things accurately also has me leery of disrupting the apple cart before we apply and close on a home.  I'll probably revisit this some months down the line.  It really just looked very odd to me.

 

Thanks for your help!

Message 5 of 6
NRB525
Super Contributor

Re: Closed Installment Loan with a Balance

Do you know what your scores are, for the appropriate mortgage scoring model that will be used?
It sounds like you have other installment loans, so that part of your mix is reporting, even if it turns out this specific loan were not.

Before embarking on stirring the hornets nest, it is best to see what the potential benefit is. It sounds like you already realize this.

As well, when you actually start getting score / file reviews from lenders, if this is really an issue it might be noted. I have my doubts whether it negatively impacts scoring.
High Bal Jan 2009 $116k on $146k limits 80% Util.
Oct 2014 $46k on $127k 36% util EQ 722 TU 727 EX 727
April 2018 $18k on $344k 5% util EQ 806 TU 810 EX 812
Jan 2019 $7.6k on $360k EQ 832 TU 839 EX 831
March 2021 $33k on $312k EQ 796 TU 798 EX 801
May 2021 Paid all Installments and Mortgages, one new Mortgage EQ 761 TY 774 EX 777
April 2022 EQ=811 TU=807 EX=805 - TU VS 3.0 765
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