How do installment loans affect credit score?

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bisbicos
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Location: Newton, MA

How do installment loans affect credit score?

Postby bisbicos » Tue Jan 31, 2012 11:02 am

Hi guys I have a question, I have a bunch of credit cards and I've been working on paying them down for a few months now, 3 of 6 have a zero balance and I currently have a 39% utilization. my credit score is 639 and I was wondering how does an installment loan affect my credit score?

I understand that when you have a high balance to credit ratio it affects it negatively, however when I graduate in may i will have about 50k in student loans outstanding. will my credit score decrease dramatically when the deferred installment loans become active?
Credit Cards
American Express: Fidelity Rewards (2% cash back) 9.5k
Zync NPSL
Discover: Discover More (5% rotating categories) 12k
Mastercard: Chase Freedom (5% rotating categories) 4.6k
Visa: Citi Forward (5x pts on restaurants) 15.7k
Citi Dividend (5% rotating categories) 5.6
Capital One Journey (1.25% cash back) 1.25k
BofA AAA (5% on gas) 2.5k
PenFed Platinum Rewards (5% on gas 3% groceries) 7.5k

Future Cards
US Bank Cash +
Chase Ink


FutureBillionaire
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Joined: Sun Jun 19, 2011 2:37 pm
Location: Down South

Postby FutureBillionaire » Tue Jan 31, 2012 1:43 pm

Installment loans help because they improve your mix of credit.
Gas: Discover It, Penfed Platinum Rewards x2, Chase freedom, Citi TYP
Plane tickets: CSP
Groceries: AMEX BCP, Penfed Platinum Rewards,Citi TYP
Clothes: Express, Amex BCP, Discover IT
Amazon: Citi Forward, Cash +
Restaurants: Citi Forward, Chase Freedom, Discover IT, CSP
Hotels and other travel: Discover Escape, CSP
Movies: BofA travel rewards visa signature(fandango), Discover IT, Citi Forward, Freedom
Bars, clubs, tomfoolery: CSP, Citi Forward, Discover IT, Freedom
Balance transfers: Kroger 123 rewards
Bill Pay: Chase Ink Plus, Citi Forward
Everyday spending: Bofa Accelerated cash rewards amex, Discover Escape

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bisbicos
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Posts: 284
Joined: Sun Jul 17, 2011 12:38 am
Location: Newton, MA

Postby bisbicos » Tue Jan 31, 2012 4:21 pm

my loans were deferred payments until 6 months after I graduate. So December 2012 I will have to start paying, and the loans will actively show 50k in debt. Won't having a almost 100% utilization rate on those loans negatively affect my score?
Credit Cards
American Express: Fidelity Rewards (2% cash back) 9.5k
Zync NPSL
Discover: Discover More (5% rotating categories) 12k
Mastercard: Chase Freedom (5% rotating categories) 4.6k
Visa: Citi Forward (5x pts on restaurants) 15.7k
Citi Dividend (5% rotating categories) 5.6
Capital One Journey (1.25% cash back) 1.25k
BofA AAA (5% on gas) 2.5k
PenFed Platinum Rewards (5% on gas 3% groceries) 7.5k

Future Cards
US Bank Cash +
Chase Ink

Razanbuddu
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Joined: Thu Dec 01, 2011 8:27 am
Location: Raleigh, NC

Postby Razanbuddu » Wed Feb 01, 2012 9:15 am

I believe mortgages and installment loans are counted differently than revolving credit (credit cards).

I know when i looked at my credit report recently there is a section for mortgages, a section for installment loans, and a section for revolving credit lines. Since any installment loan would start at 100%, i think it's understood that that doesn't necessarily mean something is wrong.
Primary Cards:
Chase Sapphire Preferred (General Use)
Chase Freedom (For 5% Categories)
AmEx Blue Cash Preferred (Groceries/Gasoline/Dept. Stores, If not Freedom category)
Credit Union Visa (low APR)



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