@beautybrainsbooty wrote:Hey ya'll! Will paying off my installment loan early increase my score? I actually have gotten tremendous point boosts because I added TL's that I didn't have (cc's, installment loan to an already perfect auto loan payment history) I was considering paying this off if it will give me enough bump to be in the 700s on EQ (im really close!). Or is it better to just pay it monthly over the full year? How heavy is the weight of an installment loan in FICO scoring?
Minimal, installment loans are a different animal than the FICO revolving utilization calculation.
If the interest isn't of consequence for you, it is always better to stretch out the payments to make that tradeline as long as possible. Once you pay it off, the clock starts running on the 10 years till it falls off, and you're no longer accruing positive payment history on the tradeline. Additionally if the length of the tradeline ticks over a theorized seasoning boundary (tradeline length appears to matter) that might be straight bonus points too. Certainly if you're coming up on either six months or able to cross some year boundary, I'd keep it just because of the possibility if the additional interest was fiscally irrelevant. My definition of irrelevant is different than others though, that's an individual preference.
If anything, there have been reports of people's taking a small FICO penalty for paying off installment loans; much like it's a good thing to have two revolving tradelines, and probably active ones at that, there maybe a similar scoring factor on installment loan tradelines though I'm guessing it might be a small bucketing change instead of the mix of credit w're pretty confident the first installment line is nothing but goodness for. We have seen anecdotal reports that having two, open installment loans is a good thing, but quantifying that is difficult as usually the point swings involved are pretty minimal and might be for completely unrelated things.
In any event, once the negatives are gone, and you have a good number of tradelines established, and you're not saddled with a mound of revolving debt according to FICO, the path to gold-platedness is through payment history. Time will take you everywhere you want to go if you maintain good habits, there's just not a lot of other things you can do to continue prettying up your report, and you're in a great place right now for building to that.
Wow! Thanks for that information! I totally get it now. I figured it was a very small bump basically because of the difference of when it hit my report and when my CCs hit it was double digit increases. I will keep it for the year to maximize the length. In my case, I have had nothing but score increases for additional TLs so payment history is where its at.
This forum and the advice here has proven invaluable in helping me move my credit score up and up! 
