What Kind of Installment Loans Increase FICO?

FICO scores are a way of letting lenders and creditors gauge the reliability of borrowers when it comes to repaying loans. According to the FICO website, 90 percent of lending decisions involve a FICO score. One of the most significant factors on the score is the loan installment.

If you are unsure about whether your loans affect your FICO score, make sure to contact your lender. They should be able to provide you with details regarding where your loan information gets reported to. That way, you can have a clearer picture when it comes to the impact your loans have on your credit.

For starters, installment loans come in several different flavors. Some of the most common uses include mortgages, car loans, and personal loans. Each of these requires “good” or better credit and requires repayment in monthly installments. If a borrower consistently pays off the required amount each month, that will boost their FICO score.

Installment loans, different terms and rates

All installment loans are not equal, though. They have different terms and rates, which can directly change how much they influence your FICO score. For instance, a mortgage often takes 20 to 30 years to pay off, which provides borrowers a longer window of time and a sturdier foundation to build their FICO score.

Similarly, the purchase of a home is likely the largest single investment you will ever make. Individuals will be on the hook to repay hundreds of thousands of dollars to be a homeowner, which can dramatically increase their FICO score when repaid each month.

Smaller loans, such as the ones listed below, can also boost the score when paid on time.

  • Secured and unsecured personal loans
  • Fixed-rate loans
  • Variable-rate loans
  • Co-sign loans
  • Payday loans
  • Debt consolidation loans
  • Personal line of credit
  • Credit card cash advance


Vivaan Marsh is a professional writer, editor and an expert in personal finance. Her career as a professional writer stretch for over 11 years. One of her passions in life is to help everyday families with there financial problems, making their life a bit easier and explaining complicated topics in an easy way. Read more >

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