I thought having less debt is better.
The short answer is, it depends. Your "credit" is a general term for your ability to borrow money from someone else. Some groups, most notably the company FICO, have made scores to try to evaluate people's relative likelihood to repay money they borrow. They don't share exactly what goes into your score, but it's generally accepted that having a history of using--and repaying--a mix of different types of loans can improve your credit. See more here: federalreserve.gov/consumerinfo/fivetips_creditscore.htm. At SoFi, we think traditional credit scores are outdated and opaque, so we don't use your FICO score, though we do look at your history of repaying debt.
In general, installment loans have little affect on FICO scores.
Jeffery C That is not so. Your FICO score can be negatively affected, and given other factors, quite substantially, if you don't have a current installment loan. This is especially true if you are carrying a substantial amount of revolving credit debt. Best wishes!