Revolving Vs Installment Credit
What is the difference in the way these are used in scoring by the credit bureaus? Are they looked at separately or combined? One can easily figure the 30% mark to try to stay under with revolving accounts....how is it figured (or is it even used) with installment accounts (for which I have no idea what to use as the amount of available credit)? Am I better paying down revolving accounts or installment accounts? Thanks for any help.
I think I understand your question.....
The differences in revolving and installments is huge. Revolving is credit cards, installments are house payments, car payments, etc. Like it's been said a thousand times, revolving credit is horrible for you when it's a large amount. Pay down the revolving credit and make your installments on time, everytime. With revolving credit, it seems easier, because there's a minimum due. it's too tempting to just pay that small amount. That looks really bad to lenders. You have over-extended yourself, and can't pay it off. therefore they are less willing to take a risk and loan you money. I hope I understood, and answered your question.
Pay down the credit cards! Make sure the cards fall within 20-30% of their recorded max. The scoring for credit cards is blended across all the cards. If ONE card is near max and the other are in the 20-30% of max range. Your score is impacted. CC's near the max impact score along with payment history. Finally, 2-3 cc's is plenty. American Express is a strong trade line to lenders. (due to their stringent requirements/qualifications) Too many cc's may hurt your score as well.
Eric & Rosa
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