Does an installment loan hurt my score?

[tmacar]

I dunno. Sometimes folks figure if they got the report directly from the company's own site (Experian, TransUnion) the scoring systems are the same. Thing is, if you're looking at all 3 FICOs, and there's a big difference, there MUST be some big difference in what's on the reports. And Equifax doesn't actually score their report, FICO does. So if something's wrong, and it isn't differences in what is showing up on the actual reports, I'd think it must be FICO's fault, not Equifax's, much as I HATE to not blame Equifax after some of the things they've pulled on me in the last 3 years.

I know I've got some differences on mine. For instance, I have a paid off auto loan that was only ever reported to TransUnion. No biggy, only had the loan about 3 months before I refinanced it elsewhere. And the one installment loan that I just paid off 2 or 3 months early, it is on Equifax (not showing as paid yet) but it has never been on Experian or TransUnion.

And based on my "new" score after the insane 56 point drop, the FICO simulator, which had said my score would go to between 728 and 768 after all my new revolving balances reported NOW says I won't even break 700. It gives me a possible range of 655 to 695. So that 56 point loss has cost me a new vehicle with $5,000 in rebates that go away on June 1, because I need 720 for a no down payment 5.5% loan. FICO has REALLY screwed me.

[haulingthescoreup]

tmacar, I should have asked this before, and maybe it's on this thread somewhere, lol, but when you compare the before-and-after score reports, what has changed on screen two, with the positives and negatives? What were you praised and scolded for before, and what is it now?

Something must be regarded differently to have such a whopping impact. We've already seen on the other threads what happened when Sallie Mae recoded some of their loans. Same raw figures, but treated differently because of the coding, and so wildly different scores. Also check the util that they publish on Credit-at-a-Glance screen, balances, etc. Even if the raw numbers haven't changed, they must be getting crunched differently.

[tmacar]

OK, I found a difference, but NOT one that makes any sense.

I had Payment History "Great",
Amount of Debt "Not Good" (My revolving debt to credit was at 81%
Length of Credit History "Good"
Amount of New Credit "Good"

This is precisely why I paid my revolving down to 15%, with 3 accounts at zero and no account over 25%.

Only 3 of the pay downs (The 3 smallest payments, by some coincidence)are showing, 2 of them just showed up today, and I went back up all of 3 points, to 605.

My Amount of New Credit has gone to "Not Good"!!!

That makes NO sense. Not for a 56 point drop. In the first place, $2,500 is a very small amount of added credit. It's only maybe 10% to 15% of what a typical car loan is.

For another thing, the most recent account I opened (except this one) was in July of 2007, and on the "Credit at a Glance" page, the number of accounts opened within the last year only went from 1 to 2.

2 accounts in a year costs 56 points? I had a higher score (623) in March, when I had 6 accounts opened in the last year, every single category on page 2, except for Length of Credit History was "Not Good", I had 6 late payments (from early 2001, now only 1, which goes away in July or August) and a collection (also 2001, now gone).

On "Credit at a glance" I had red flags on the 6 late payments, Accounts with Balances, Accounts Opened In Past Year, and Collections.

NOW the only red flag is on Accounts With Balances (which will go away when my payments post). NOTE: NO red flag on Accounts Opened in Past Year, even though the Amount of New Credit has gone from "Good" to "Not Good". THIS seems to be where the problem is, read on.

HOW can 1 new $2,500 loan give me 602 when I had 623 with 6 new accounts in the past year (now only 2 and no red flag), 6 late payments (now only 1 and no red flag), a collection (now none and no red flag), a total of 4 red flags (late payments, balances, collections, new accounts in the past year) versus only 1 (balances) now?

Oh - and the age of Credit History hasn't changed, it is and was 9 years.

[haulingthescoreup]

I'm not saying this is a complete explanation by any means, but I lost 25 points on EX when a $12K car loan posted, because when it first hits, it's at 100% util, which even in installment land, is not good. The negative went away as soon as the first payment hit. I can't break down the scores because there was so much else going on at the same time.

concorduser posted a big score drop with a new car loan (new loan, not necessarily new car.) I wonder if that's what we're seeing, maybe with some other stuff going on it the background?

I found these posts by him, and I think I remember another member posting about a surprising score drop with a new loan.

http://ficoforums.myfico.com/fico/board/message?board.id=creditcard&thread.id=44599

http://ficoforums.myfico.com/fico/board/message?board.id=creditcard&thread.id=44977

[tmacar]

I just found another page, "Understanding Your FICO Score", where they "explain" what is hurting me. On the current report, they say I'm being hurt because I have a consumer finance account. THAT makes no sense, because I have no new consumer finance accounts, this was NEVER mentioned as a problem before (including May 5), and they say I have 4 consumer finance accounts, which I don't. I have, and have had since the beginning of 2007, 3, one of which is an auto loan. Do they count it as a consumer finance loan if it's for an auto? I checked, it does say Auto Loan on the listing.

Could they somehow be counting the Credit Union loan as a consumer finance loan?

Here's what they list as problems with my score at 602:

Heavy Use of Revolving Credit, 57% - This was 83% on March 1, at 623, and 76% on Mayy 5, at 658

Recently Opened a New Account, the $2,500 credit Union Loan last month, but 56 points??? This category is not on the Nar 1, 623 point report, but is on the May 5, 658 point, report, saying 10 months ago. I guess you get this if you opened ANYTHING in the last year.

Short Credit History, 9yrs 9 mos, avg age 3 yrs - Mar 1 (623) 9yrs 7 mos, same avg age and May 5 (658) Same As Today

Consumer Finance Account, 4 accounts - NOT, at MOST 3, one of those an auto loan, and this was never mentioned before.

And that's it. However, except for the new account and Consumer Finance thing, which is wrong anyway, Mar. 1 (623) had the same categories, with worse specific numbers, PLUS:

A Serious Delinquency AND a Collection, 3 accounts with 60+ day lates and 1 collection

AND Recently Been Looking For Credit, 6 inquiries.

And except for the new account and the incorrect Consumer Finance thing, May 5 (658) had:

Heavy use, but with a 76% instead of the 602 report's 56%

Short Credit History, identical to the 602 report's

Recently Been Looking For Credit, 5 inquiries (This one not on the 602 report at all)

Recently Opened a New Account, 10 months ago - They swap the 10 months ago one for the credit union one on the 602 report

All in all, it seems like the negatives they list are as bad on the May 5 (658) report and are even worse on the Mar 1 (623) than they are open the new May 10 (602) report, except that consumer finance entry which is not even accurate. Could THAT be costing me 56 points?

[RobertEG]

It is not true that identical data in your CR with each of the three CRAs will necessarily lead to identical FICO scores generated by each of the three CRAs,  As is discussed explicitly  in the most recent webinar conducted by FairIsaac, which you can listen to on the Credit Education tab at the top of this page, FairIsaac does not sell a single, plain vanilla scoring algorithm to each of the CRAs.  Rather, they sell different versions to each that are tailored to their (the individual CRA) requirements.  FairIsaac acknowledges that the difference, even with identical CRs, can typically be as much as 20 points, even though all three are true FICO scores generated under algorithms provided by FairIsaac. 

It is also a misconception that FairIsaac generates the actual FICO scores.  They do not  The CRAs do.  FairIsaac sells the algorithms to the CRAs.  FairIsaac does not maintain current CR data, and does not generate the scores directly.  They provide the software to do it, and they sell many versions to different lendors and CRAs. 

Message Edited by RobertEG on 05-12-2008 09:04 PM

Message Edited by RobertEG on 05-12-2008 09:06 PM

[tmacar]

Where, exactly, in that "education" thing did you see that? I can't find it. How do you navigate to it, starting from clicking the "education" tab at the top of this page?

Anyway, I know Fair Isaac sells different scoring systems to a number of companies, but I thought they used the same one for the scores they put up on the MYFICO site.

[RobertEG]

Go to the NEW!Creit Education  tab that is in the top menu of this forum, above. 

Once in there, go to the Educational Videos, and select "more"

The webinar I was referring to was the one dated 2/22/08.

Its about a half hour long, and has some great info.  They make it very clear that they do NOT do the scoring themselves,  they only sell the formula for their customers to run their data against. They dont have the data, and thus cant do the actual scoring. The scores you get on myFICO are those generated  through the iindividual data and FICO algorithm of each CRA.

I hope this helps.

Message Edited by RobertEG on 05-12-2008 11:19 PM

Message Edited by RobertEG on 05-12-2008 11:20 PM

Message Edited by RobertEG on 05-12-2008 11:34 PM

[RobertEG]

Direct quote from FairIsaac on the FICO Education post...

"In general, when people talk about "your score," they're talking about your FICO® score. But in fact, there are three different FICO scores developed by Fair Isaac – one for each of the three credit bureaus – Experian, TransUnion and Equifax. Fair Isaac makes the scores as consistent as possible between the three credit bureaus, but even if your information was exactly identical across all three, your scores might still differ because the models for the three bureaus were developed separately."

[smallfry]

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@RobertEG wrote:

Direct quote from FairIsaac on the FICO Education post...

"In general, when people talk about "your score," they're talking about your FICO® score. But in fact, there are three different FICO scores developed by Fair Isaac – one for each of the three credit bureaus – Experian, TransUnion and Equifax. Fair Isaac makes the scores as consistent as possible between the three credit bureaus, but even if your information was exactly identical across all three, your scores might still differ because the models for the three bureaus were developed separately."

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Robert I know that scores can vary among the 3 bureaus but when all start at very close to the same scores with nearly identical info and go their separate ways after a period of time something is amiss.