Small loan killing my score

[CreditPoor]

I have a small $240 loan with a balance of $190 remaining. I opened this loan to help with credit mix , so it's a 24 month loan at $10 a month.

It seemed like a good idea, but now it seems to be dragging my score down. Instead of boosting I'm getting dinged for loan balance which just doesn't make any sense. Is this normal? Should I just close?

[CreditPoor]

I'll add that I currently have 2 NFCU pledge loans paid down to 97%. Got this loan before I opened the pledge loans

[JoeRockhead]

The benefit from this type of loan would be when the balance goes to less than 9% of the original amount.... This is doing nothing positive for you... I'd close it and save your money.

[CreditPoor]

Yeah, I just closed it. I hesitated for a couple months becau I thought it would do more damage closing it. However seeing that I'm getting penalized for having it open I've concluded that it will probably cancel it self out now that it's closing paid in full.

[GZG]

ideally you have one pledge loan, for as long of a term as you can, paid down like you have now. 

how long are your two loans for currently?

I would pay one of them off and when that runs out, apply for a longer term one, 3-5 years

[CreditPoor]

Both are for 1000 term of 12 months. I planned on doing a 5 year when these are done. 

[FicoMike0]

Penfed does $25 x term in months, $1500 for 5 years. 2.05%.

[Thomas_Thumb]

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@CreditPoor wrote:

I'll add that I currently have 2 NFCU pledge loans paid down to 97%. Got this loan before I opened the pledge loans

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Fico looks at open installment loan B/L ratio in aggregate. You do not get a score boost for individual balance to loan ratios (B/L) below 9% . Aggregate B/L needs to be below 9%.

Having multiple open loans does not help score. Only one is needed. For those with an open mortgage, a token SSL or pledge loan - even if paid to below 9% - will not improve score.

Note: Fico does look at length of installment loan payment history as a scoring factor independent of B/L.