Kat wrote:
That's interesting. I had assumed that 'consumer finance' loans were from companies offering credit for retail stuff like furniture. I didn't realize that this included a personal loan from your bank or cu.
Thanks for your reply.
Unsecured personal loans from a major bank or CU are not typically coded as CFLs.
Keep in mind that 10% of your score is not 85 points. It's only 55 points. (Remember there is a minimum score of 300, so there are really only 550 points to be had.) The question of installment loan vs. no installment loan is only a small piece of that 10%, as I said above. Yes, I suppose that if one has the "perfect mix", it would be worth the full amount of points for this category, but presumably you already have some points in this category just for having credit cards (and maybe a store card) in the first place. It's not an all or nothing thing here. The effect of adding an installment loan to your mix may be positive, but I wouldn't expect it to be huge, and I definitely wouldn't take out an installment loan I didn't need just for the sake of having one.
Also keep in mind that getting a new installment loan will mean a new inquiry and a new account, which together will probably do enough temporary score damage to offset whatever benefit the additional account type would have added to your "mix" in the first place.
If you really want to help your score fast, concentrate on paying down your CC balances. 65% revolving utilization hurts a lot.
Message Edited by cheddar on
02-29-2008 10:11 AM
