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How much can an installment account increase scores? Thinking of having my rent reported.


Help1285
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My Fico scores are 650's across the board. I have no CC debt and I am in the process of rebuilding. All my old debts are paid off & no open CA.

I was thinking of signing up for a rent report service so I can improve my Ficos.  They are able to report back 1 year. Will an installment account improve my Ficos? How much?

 

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What is the deal with the increase in threads about 'rent reporting services' of late?  Is that the new 'buy a tradeline?'

 

Unless you KNOW that they are able to report as an installment, which they really are not, you gain little.  You are more apt to have it show as "other" with no real benefit other than the loss of points for a new account.  Further, you are giving an unknown entity access to everything they need to engage in identity theft, especially since you have no idea about their level of IT competence.  It would be different if your actual landlord was offering to report the actual terms of their lease Agreement with you, but even then, it still is NOT an installment.  It is more on par with the furniture people rent by the month.  Very few own it at the end, whereas with an installment/note, you have a balance that is actually being paid down.

 

As to the impact on actual Fair Isaac models (you don't say which one is producing the score you reference), the effect of a real installment loan (ie. car note or personal loan or mortgage) is going to vary by model AND the content of your current reports. 

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19 hours ago, Help1285 said:

Thank you @centex I appreciate your input. They advertise a lot on social media so I looked into it. I thought it was an installment. I will not be getting their service. 

My Fico scores are from Myfico.com

Getting scores from MyFICO still does not let us know which model is being discussed.  Surely you saw the multitude of flavors of scoring. 

 

As to advertising on social media, so do a lot of nefarious types.  They BANK on the gullibility of the desperate.

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4 hours ago, centex said:

Getting scores from MyFICO still does not let us know which model is being discussed.  Surely you saw the multitude of flavors of scoring. 

 

As to advertising on social media, so do a lot of nefarious types.  They BANK on the gullibility of the desperate.

Well thank you. You saved me some money. The Fico 8 scores.

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On 3/26/2022 at 2:19 PM, Help1285 said:

My Fico scores are 650's across the board. I have no CC debt and I am in the process of rebuilding. All my old debts are paid off & no open CA.

I was thinking of signing up for a rent report service so I can improve my Ficos.  They are able to report back 1 year. Will an installment account improve my Ficos? How much?

 

I'm not quite sure you'll get much value out of that or even a FICO boost. Your rent will not show an account balance / UT ratio, therefore, it will not bear enough weight in their algo to make even a blip. That's like having a Chime account, which FICO pretty much ignores since you can't default on it.

 

One creative, but costly approach you could take is to get a 5-year personal loan and use that money to pay several months rent in advance, if your landlord permits it. The interest will obviously cost you and this is a risk, but you may get enough of a ROI via a score bump and a solid footprint that shows you can pay debt along the way. 

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@Help1285, I strongly advise you to start focusing your credit repair efforts.  With a reasonable, time tested plan, your 650 FICO 8's suggest that you're in very good stead for "prime" credit within a year or two after setting some basic building blocks in place.

 

Forgive me for not reviewing the history that you've detailed in your various posts.  If I steer wrong as a consequence, feel free to nudge me in the right direction.

 

-- With 650 FICO 8's, all you're lacking is a year or two of constructive positive account history.  This means starting on a path the build up some revolving accounts (qualify is MUCH more important than quantity).  Ideally you want to establish 2-3 accounts in short order and then give it a rest for 6 mo to a year.

 

650 is modestly too low for prime issuers.  Capital One will likely extend you an account:  see their main website and look for the card labeled "For Building Credit".  (They have a pre-qualifier on their website you might try first.  If nothing pops, just app for their credit builder card.)

 

Synchrony Bank retail cards are another good place to start, with reputable retain partners.  The 3 card options that are mentioned as dipping to 640 credit score for qualification are Amazon Store (not the Chase issued one), JCPenney and Lowe's.  Amazon is a particularly strong candidate since it has versatile use, providing an opportunity to "air it out" most months.  (Active use of credit is the most reliable means of building credit limits.)

 

If unsecured card issuers are resistant to your applications, then I recommend applying for the Citi Secured MasterCard and working with that for 6 mo before retrying for unsecured cards.  This card is outstanding in that, if managed well, will graduate to a non-secured Citi card (setting you up nicely for application for some of their better offerings).

 

--  I'll stress the adage, "not a race; instead a marathon".  Allow time for each successful step taken to be reflected in your credit history, staging you for the next step.  Once you find that you have sustained success with credit approvals, be selective.  Your credit building efforts will be most successful and rewarding if you focus on credit opportunities that have long-term value.  Among other things, that means avoiding applying for retail cards that are merely "easy to get" or offer register bonuses.  Don't be tempted to apply for accounts promising a mere $100 or $200 for signing up.  If you will, with each card acquisition, you're looking for a spouse who'll "go for the distance", not a one-night stand.

 

 

 

 

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if your report is dirty adding an installment, especially some pay-to-play account, will not be much help.

 

adding high quality secured or unsecured revolving accounts, on the other hand, is gold.

 

you can have scores over 800 without an open installment account.

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