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Does a student loan is required to improve your credit score? (even if you do not need it!)
Based on Amex:

2 Lack of recent installment loan information
FICO® Scores consider recent non-mortgage installment loans (such as auto or student loans) information on a person’s credit report. Your score was impacted because your credit report shows no recent non-mortgage installment loans or insufficient recent information about your loans.

Based on Experian/Equifax Transunion:

What factors raise your PLUS Score:

Installment loans usually carry large fixed monthly payments. Keeping your credit report clear of these major monthly expenses tells lenders that you have more money available to take on the additional debt of a new account.

On one side is good to not need a loan, on the other side, I have never taken any installment loans, and I got penalized for that.

Should I take a student loan as installment loan in order to increase my credit score? (even if I do not need it)

My current score:

Credit Secure
Report Date: 5/26/2016
Experian 743
Equifax 739
Transunion 743

May 11th
Fisco 8 725

Fico 691


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You know what its going to say if you do get a installment loan? "Your last inquiry is too recent", "Your new account is too recent", "Length of time installment loans have been established", "Proportion of loan balances to loan amounts is too high"...  Not to mention your scores will take a hit from inquiry/new account/more debt.


There are about 40 some odd generic reason codes for the "key factor" that affect your score, they pretty much just pick any random reason codes until your score past 800. Not saying they aren't correct, however often times they are directly contradicts each other. At some point, you should stop doing things just for the benefit of credit scores, often it would have opposite the desired effect. Besides, when you paid the loan off? You score will drop and that very reason code might pop back up once again. Those codes are used for your credit/loan denial reasons as well.


You should consider canceling the PLUS scores, in the credit world, they are probably less relevant than VantageScore, you already have EX FICO8 score from AmEx and EQ FICO8 "Bankcard rate" score from Citi for free, certainly no need to pay for the PLUS scores. In a pinch, you can always do the one dollar 7 day trial from C redit C heck T otal, you get credit reports and FICO8 score from all three bureaus, just be sure to cancel it with-in 7 days, you can do the 7 day trial every month if you want, just need a new email addy.

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Don't take a student loan if you don't need it.  Please read the articles provided on this site for full information about ways  that you can increase your credit and don't be in a rush.  I learned a lot and have benefitted from that knowledge.  You can,too.

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Installment loans and credit scores

Short answer: no.

Middle answer: relying on educational scores isn't wise, FICO > Vantage > everything else which should be ignored these days.

Longer answer: FICO at least makes absolutely no distinction between any type of installment loan - anything from a $5M mortgage to a $500 share secured loan, to everything in between including student loans is counted identically.

Vantage Score (as found here at CK) doesn't behave quite in the same way: namely, there is some distinction between loan types as my mortgage was a clear positive based on score reaction whereas I actually took a hit under FICO models from throwing my aggregate installment utilization from ~5% to ~99% (FICO 8 and FICO 98 at any rate).

If you're just trying to round out your scorecard under FICO and to a lesser extent Vantage, simply go get a share secured loan from a credit union, pay it down to around 5% (9% if we're being specific is the breakpoint) but not off and then sit on it assuming they push the payment date well out into the future... if you don't belong to a CU or you're not certain they will push the payment date out if you make a lump sum non-principal payment (DCU does not for example) then simply do it with Alliant FCU as they're known to work and are open to everyone, Penfed is another which should work just fine.

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