A loan doesn’t factor into your credit utilization because it’s a form of installment credit—not revolving credit. Installment loans will not negatively affect your score as long as you are paying on time. (Of course the HP and new account will ding)That's because when you first get a loan, credit agencies understand that the loan balance will be relatively high during the beginning of its lifetime. High installment loan utilization does much less harm to your score than does revolving utilization. Because of this, in a way CRA's forgive large loan balances than they would if it was revolving credit cards maxed or almost maxed out. When 1 loan is paid down. Points gained. Thats why we like SSL's if no loans are on a report. Combine all 5 loan amounts to balances left. Same deal= installment loan utilization. As its paid down points go up.
