Installment Loan Balance

[EaglesFan2006]

How much of an impact does my student loan balance have on my score?

My accounts are in good standing, but the balance is high (around 20k)

[haulingthescoreup]

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EaglesFan2006 wrote:

How much of an impact does my student loan balance have on my score?

My accounts are in good standing, but the balance is high (around 20k)

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Very little at all.

Installment util, including mortgage, is calculated separately from revolving (CC) util. It's CC util that's such a huge portion of your score.

There does appear to be a group of consumers who see score changes as their installment util drops, but they seem to be high scorers, maybe with long histories. For the rest of us slobs, we might see a ding when a new auto loan reports for the first time and shows 100% util, but the ding goes away the next month.

One of the comments that some people get on their reports addresses installment over 40% or so, but it's a comment rarely seen. I'm only getting 2 negative comments these days, so I have room for more, and I'm not being scolded.

Financial impact is completely separate, of course, and sweating having to pay the things one day. This answer is meant to address only the scoring impact.

[EaglesFan2006]

what do you mean comments?  I haven't see any comments on my report .... unless you mean 'adverse activity'

so installment util doesn't hurt?  i don't know i've seen all 3 reports on Annual credit report and i haven't seen anything that indicated that my installment util was hurting me...my loans are in good standng, but the balances are fairly high with all the interest....does that matter?

[haulingthescoreup]

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EaglesFan2006 wrote:

unless you mean 'adverse activity'

so installment util doesn't hurt?  i don't know i've seen all 3 reports on Annual credit report and i haven't seen anything that indicated that my installment util was hurting me...my loans are in good standng, but the balances are fairly high with all the interest....does that matter?

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It sounds like you haven't pulled your FICO's yet.

There are two different things to pay attention to with your personal credit: your credit reports, and your FICO scores. Getting your full reports from annualcreditreports.com is a great idea, but if you bought the scores that come with them, they're garbage. We call them FAKO's here: they are so-called "credit scores", but they are not used by any lenders, and no one has any idea how they're figured, or what goes into them.

If you haven't already, please read Understanding Your FICO ® Score and Credit Scoring 101 (at least the first post.)

These will give you the background knowledge you need to understand what you read here on the forums.

If you decide to buy your FICO scores, I think it's easiest to buy them here, from this site (www.myfico.com). You can no longer buy your Experian FICO score from anywhere whatsoever; all you can get are your Equifax FICO's and TransUnion FICO's. When you do buy your FICO's, they come with a score report with commentary. Screen 2 of the online version tells you what some of your strengths and weaknesses are. Now that we can't get our EX FICO's, the Suze package offers three scores that you pay for right off the bat and then pull when you want to. The advantage of the Suze package is that the scores display for a year, instead of 30 days and then poof.

At any rate, if you want to see what most lenders regard as your strengths and weaknesses, it's very useful to pull your FICO scores. But at the same time, you need to see your full reports from each bureau, and you've gotten those from annualcreditreport.com. So go over the credit reports with a fine-toothed comb, and make sure that there aren't any errors on there.

Again, your installment util is not that important, compared to your CC util. And to repeat, check back on Credit Scoring 101 and the myFICO PDF booklet: Understanding Your FICO Score.