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Do credit scores get a boost when installment loans have certain percentages left owed like a CCs?

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Do credit scores get a boost when installment loans have certain percentages left owed like a CCs?

For example I have an auto loan (my only installment loan) with 64% paid off. Would I expect a credit score increase with 70% paid off and >91% paid off? I believe these are tiers are true for your credit card balance though I could be wrong.

 

Thanks

6 REPLIES 6
Super Contributor

Re: Do credit scores get a boost when installment loans have certain percentages left owed like a CC

Installment loan utilization is looked at differently than revolving utilization in terms of thresholds.  While they're fairly well known for revolvers, not so much is known when it comes to installment loan thresholds.  One is know for sure, though, 8.9% - When you cross that threshold the greatest score gain related to the installment loan is realized.  There are no doubt points where score increases can be realized from 100% down to 8.9%, but those are definitely lesser known/proven.

 

It's also important to know that aggregate installment loan utilization is what matters.  You didn't specifically say if this was your only installment loan or not.  If you have other open installment loans, crossing any individual point on one loan won't matter the same way it would if you had only 1 loan and that was also your aggregate utilization.

Message 2 of 7
Member

Re: Do credit scores get a boost when installment loans have certain percentages left owed like a CC

It is my only installment loan.

Message 3 of 7
Valued Contributor

Re: Do credit scores get a boost when installment loans have certain percentages left owed like a CC

you get points just for having the loan.  %'s don't really play into scoring though on an installment loan.  When I paid mine off this month my score dropped 6 points for paying it off.  It factors into your score but, it's not as volatile as a revolving line is.  

 

It's like when you're starting out in credit and can't get approved for anything on the CC side of the house but, you're able to get a car loan because it's collateralized.  Once you demonstrate you can make monthly payments and gain some history the CC side opens up a little bit to get your first couple of cards.  

 

I've had many loans over the years and never really noticed much of a hit or bump when taking them out or refinancing them for lower rates.  I was in a bit of a cycle long ago where my scores were building and I would refi every 6-9 months and able to shave off 2% or more each time.  It may seem counter intuitive to do so but, my scores kept going up even w/ the multiple loans/refi going on.

500K+ TCL / 800+ FCOs
Message 4 of 7
Super Contributor

Re: Do credit scores get a boost when installment loans have certain percentages left owed like a CC


@HTucker wrote:

It is my only installment loan.


In my profile, the only big gain was when it got down to 9%. FICO 8 rose sharply. As to mortgage scores, my EX & EQ didn't budge, and my TU FICO 4 rose mildly.


Total revolving limits 720500 (594000 reporting) 10/2/19 FICO 8 scores: EQ 744 TU 782 EX 746
Message 5 of 7
Super Contributor

Re: Do credit scores get a boost when installment loans have certain percentages left owed like a CC


@Obscure-Expert wrote:

%'s don't really play into scoring though on an installment loan. 


Have you ever personally looked at your before/after scores with your aggregate installment loan utilization above 8.9% and then again when it dropped below 8.9%?  Many people (like SJ) would disagree with your statement above.  I do tend to agree that the span from 100% utilization down to 9% utilization on aggregate loan utilization likely doesn't count for much in terms of points, but when crossing 8.9% for many it is a different story, meaning that % does play a significant role at least in one spot.  

Message 6 of 7
Valued Contributor

Re: Do credit scores get a boost when installment loans have certain percentages left owed like a CC

Actually you only get points for having the loan if it’s your first one. Once you have a loan on your record, opening another one does not benefit your score, and I’ve got to disagree. It is a very significant point when you dip under 8.9%.

Actually most people get credit cards before they get loans, I think. And, credit based insurance scores actually penalize you if you get a loan first.







Installment loan reported this month,so technically, I'm at 2 months, but AoYA points were NOT reset. When new CCs hit and it is reset, I'll put the number it is.+1,+2,+2(Forgive typos, mobile.)(Everything said is Just IMHO.)
Scores updated AUG 4, '19. Since then, 5 HP dings to add; will update again.
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