What is the best type of installment loan for someone that only has credit cards?
I am rebuilding my credit and trying to improve my credit score. I have an SUV that I bought outright and only have credit cards ( A bank Visa, Mastercard, a couple of retail credit cards, gas card. I have no installment loans and I rent a home. I just added a Home Depot card to the mix and of course my credit score dropped. I use Wamu and they give you ways to rebuild your credit and analyze your score every month. This month it told me for the first time one of the reasons my score is the way it is is because I have no installment loans and I should have a good mix.. My credit score is still just below 680 which is required to get a decent loan interest rate so I don’t want to really go into more debt until my big ugly repo from 2001 falls off next year which I”m sure will raise it considerably..( I made some mistakes when I was young) Can someone give me some advice?
THE BEST TIME OF INSTALLMENT IS A CAR NOTE!!!
That’s a big question and hard to answer in a few words. Your credit score is calculated based on over 40 different items that are looked at, such as: too many inquiries, too many lines of credit, to FEW lines of credit, and so on. If you have large available balances on your credit cards that you don’t need, you might have them reduced. This will lower your outstanding credit, as unused revolving credit balances count against you, as if you had used them, already. Credit inquiries lower it temporarily, if you applied for more credit from different sources. Possibly, a small furniture payment that reports to credit agency would help, if you opened the account and pay it off quickly, but be sure to look at how much the account origination fee is, in addition to the stated interest rate, as you don’t want to pay too much for the item. Your interest rate will be higher, as it is an indication of risk from the loan extender, but a quick and favorable conclusion to the agreement should help. Obviously, after your repo is removed, you will get a boost, too. Hope that helps. Good luck.