30 point drop on EX scores

[Red1Blue]

Car loan appeared on my EX CR and my fico scores dropped by 30 points. It is only $6k loan. I guess fico did not like the ratio of Loan Balance / Loan Amount. I am going to pay off 40% off the loan before the next statment and hopefully my scores will go back up again. I did not there would be that much drop in scores.

[Anonymous]

Great, I just got a car loan last week. My score had been climbing, guess I'm going to have to work it back up again.

[Red1Blue]

Hi Gordon, Congrats on your car loan. My suggestion, once the loan posts to CR check the scores. If there is substantial drop in scores, you are better off paying off the loan by 35-40% and leave the balance of the loan at 60-65%. Looks like that is the safest way. Amex and other CCC's start worrying when they see such large score drops. I am sure they would understand being in business so long.

[Anonymous]

I guess I'm in trouble then too...

[Anonymous]

I'm sitting here with a frown on my face! I'm in the middle of getting a loan for a 2007 Avalanche. What will that loan do to my credit and will my score only go back up by how much of the loan I got left to pay?

[Red1Blue]

Hi i9, I am sure the scores will go back up again. It is just a matter of time and amount of loan balance left on the account.

Here is the message I got on my fico score.

"The remaining balance on your non-mortgage installment loans is too high.

Your FICO score weighs the balances of your non-mortgage installment loans (such as auto loan or student loans) against the original loan amounts. In general, when you first obtain an installment loan your balance is high, and as you pay this loan down, the balance decreases.

Keep this in mind: This factor will have less of a negative impact on your FICO score as you pay down your installment loans and the total balance decreases.

 FICO High Achievers have paid down an average of 35% of the principal on their installment loans."

[Anonymous]

I am hoping that I can just pay down my cards (pay them before the statement cuts b/c I PIF every month). That would be too much for me to pay on the car loan.

[haulingthescoreup]

concorduser, is it possible that the drop is not so much the car loan but the plat card hitting?

It's really very unusual for an installment loan to have that much effect on scores, and their util doesn't seem to do much, either.

Another possibility is that your scores now think that you have too many accounts reporting balances. That is the one tough thing about loans --by definition, if they're not yet paid off, they do report balances.

[Red1Blue]

Hi Hauling, I am pretty sure score drop is due to the new car loan. I am planning on paying off 40% of the loan before the next statment and hopefully my score should go up again.

My Amex Platinum and Optima Cards are not reporting to CR yet. Actually once these cards reporting my score will go up as they will be reported as opened in 1995 my first Amex Member status. 2 accounts that are 13 year old.That will give a boost to the age of my accounts.

As per inq's 2 new hard from Amex. But that should not make that much difference as my previous inq's are 37 now total 39.

As per the balances on 2-3 accounts probably about $20-30 total outstanding as balances.

I check all 3 CR's on TC every day. When I saw the car loan post to TU/EX I pulled both those reports. My TU took a 11 point hit and EX tool 30 point hit. It is not reporting to EQ yet so I did not bother pulling the Fico for EQ yet.

I can not wait to bring the balance of loan by 40% and let the Amex accounts post. That should give my scores a good boost.

[haulingthescoreup]

Wow, EX was harsh!

That's amazing, I've never seen nor read of a hit like that for an auto loan. Hope it all bounces back soon!