@Anonymous wrote:
HI. Actually I have a auto loan that was open the same month as the installment loan. I wanted to have a mixture of credit. I know my Barclay's card reported in December but at the time I was at a 664 after it reported. Well Tuesday night I logged in an notice my score had decreased by 16pts. I checked my report thoroughly an nothing. All remains the same. I even checked the inq's. Still nothing. I then purchased my Ex score from here an it reported a 16pt decrease (648). This morning I was telling my brother that we both made a mistake paying off our installment loans an that's when I log in again to find I lost 23 more points. This is mind boggling. Tomorrow I am going back to my CU to open another installment loan. I will have 2 again. 1 shared secured an 1 auto. Hopefully I can gain these score back over the next 6 months.
Not having an installment loan (most auto loans are installment loans) will likely reduce your score. For some people the impact can be more than others since your overall credit file effects how much any one factor changes your score. You don't have to rush to get an installment loan, but if you choose to, just make sure it is a small loan. I am rarely an advocate for paying interest for a higher credit score. You should never do it with credit cards (you don't need to), but in some situations it might make sense to do it with installment loans.
Additionally, getting a new installment loan will hurt your credit due to a new inquiry and a new account. The damage from the new inquiry and account will be likely be less than the gain from a new installment account (if your 23 point loss is from the installment account being closed only).
