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Car loans, student loans, and home loans are examples of installment accounts. Installment accounts have fixed terms and require regular payments. With an installment account, you owe a certain amount of money and have a fixed amount of time in which to pay it back. You must make monthly payments at a set amount which remain constant from month to month until the loan is paid in full. All three credit agencies—Experian, Trans Union, and Equifax—will report information related to installment accounts in the credit account history section of your credit report.
If you have an installment account or had one within the last seven to 10 years, it should appear on your credit report. The name of the creditor, the date the account was opened and how long it took you to pay it off will also be included. The report will also note your payment history and may include any missed or late payments. Your credit score could be lowered if you have an installment account where most of the balance has not been paid. Therefore, it’s important to monitor the number of installment accounts you have and their balances. However, creditors will likely look at your debt to income ratio as they determine your level of credit risk. Also, some credit counselors recommend reviewing your credit report every few months to ensure that the report is accurate and to give yourself time to sort out any inaccuracies, which could affect your ability to qualify for a loan.
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