FICO Impact When Installment Loan is PIF

[Anonymous]

So question do installment loans count towards/against your fico score amount of debt? As I had one through my local CU that I paid off this month. So Curious if that will affect my fico score. 

[UncleB]

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@Anonymouswrote:

So question do installment loans count towards/against your fico score amount of debt? As I had one through my local CU that I paid off this month. So Curious if that will affect my fico score. 

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If it was your only installment loan you might see a slight score drop once it reports as PIF since FICO rewards a credit mix.

If you want more info, I can move this over to 'Understanding Credit Scoring' and there are plenty of people who are well-versed on what is known on this very subject. 

[Anonymous]

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@UncleBwrote:

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@Anonymouswrote:

So question do installment loans count towards/against your fico score amount of debt? As I had one through my local CU that I paid off this month. So Curious if that will affect my fico score. 

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If it was your only installment loan you might see a slight score drop once it reports as PIF since FICO rewards a credit mix.

If you want more info, I can move this over to 'Understanding Credit Scoring' and there are plenty of people who are well-versed on what is known on this very subject. 

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Yes please . I mean it was my only loan I have out but I had two previous loans that I paid off in full from the same CU. So will taking an Auto loan out next month actually improve my score then? 

[UncleB]

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@Anonymouswrote:

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@UncleBwrote:

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@Anonymouswrote:

So question do installment loans count towards/against your fico score amount of debt? As I had one through my local CU that I paid off this month. So Curious if that will affect my fico score. 

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If it was your only installment loan you might see a slight score drop once it reports as PIF since FICO rewards a credit mix.

If you want more info, I can move this over to 'Understanding Credit Scoring' and there are plenty of people who are well-versed on what is known on this very subject. 

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Yes please . I mean it was my only loan I have out but I had two previous loans that I paid off in full from the same CU. So will taking an Auto loan out next month actually improve my score then? 

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Alrighty, @Anonymous... got you all taken care of. 

I know enough about this part to be 'dangerous', which is why I usually like to defer to @Anonymous and all the other really smart people we have who stay on top of all the ins-and-outs! 

[SouthJamaica]

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@Anonymouswrote:

So question do installment loans count towards/against your fico score amount of debt? As I had one through my local CU that I paid off this month. So Curious if that will affect my fico score. 

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Since it's your only open loan, yes unfortunately your FICO 8 score will drop.

Your other FICO scores will probably have less of a reaction.

[Anonymous]

Was the loan almost paid off (<8.9% of the original balance) when you paid it off?  If so, you'll definitely see a score drop of probably around 25 points give or take when it reports closed.  If the balance you owed was > 8.9%, you'll likely still see a drop, just not as much.

[Anonymous]

The folks here will be able to better advise you if you tell them what your balance was on the loan just before payoff and also the original amount of the loan.

You write:

"so will taking an Auto loan out next month actually improve my score then?"

Are you planning to get an auto loan regardless -- because you really need a car -- or would you be taking the loan out because you hope it will improve your score?  The latter is a bad idea.  A car loan is a very big loan and should not be taken out because you wish to tinker with your score.

Before you apply for the auto loan you should try to get your scores as high as they can be.  The first place to look is to make sure that all your cards are reporting $0 except one, with the remaining card reporting a small positive balance.

[Anonymous]

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@Anonymouswrote:

The folks here will be able to better advise you if you tell them what your balance was on the loan just before payoff and also the original amount of the loan.

You write:

"so will taking an Auto loan out next month actually improve my score then?"

Are you planning to get an auto loan regardless -- because you really need a car -- or would you be taking the loan out because you hope it will improve your score?  The latter is a bad idea.  A car loan is a very big loan and should not be taken out because you wish to tinker with your score.

Before you apply for the auto loan you should try to get your scores as high as they can be.  The first place to look is to make sure that all your cards are reporting $0 except one, with the remaining card reporting a small positive balance.

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I am getting the car regardless. 

[Anonymous]

And I am already under 30% uti on my cards only two cards have a balance. 

[Anonymous]

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@AnonymousAnd I am already under 30% uti on my cards only two cards have a balance. 

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When you have a second can you circle back and address the question posed earlier regarding your installment loan utilization just prior to paying it off?  That will really help us in terms of being able to ballpark the score gain associated with closing the loan and possibly opening another.