I hear that installment loans can improve your credit. I do not have a loan on my home or car, so I have no installment loans. i read that they are supposed to help your credit score, but them it sounds like they don't actually cause a positive effect until you owe less than 8.9% and that then you lose points when they are paid. I am so confused. Should I get one or no? [score stuck for months at 668]
@vicky3vicky wrote:I hear that installment loans can improve your credit. I do not have a loan on my home or car, so I have no installment loans. i read that they are supposed to help your credit score, but them it sounds like they don't actually cause a positive effect until you owe less than 8.9% and that then you lose points when they are paid. I am so confused. Should I get one or no? [score stuck for months at 668]
I would recommend addressing any derogatory or delinquency that is suppressing your scores.
If utilization is high, then seek AZEO All Zero Except One.
After reading the below, then I would suggest at minimum a 5 year SSL. 1 year would be too short and you may be penalized for opening new accounts (if on a clean score card), lowering AAoA Average Age of Accounts.
Here are good primers to read.
Here are two institutions that have SSL which you can pay in advance to 8.9% utilization without shortening loan term:
NFCU - membership restrictions.
SSFCU - geofence.
@vicky3vicky wrote:I hear that installment loans can improve your credit. I do not have a loan on my home or car, so I have no installment loans. i read that they are supposed to help your credit score, but them it sounds like they don't actually cause a positive effect until you owe less than 8.9% and that then you lose points when they are paid. I am so confused. Should I get one or no? [score stuck for months at 668]
IMHO, no. I think the positive effects of adding a new account like that are greatly exaggerated in this forum.
