Understanding FICO® Scoring

[bearcat59]

Quick questions here. I know that I have read several times that installment loans do not affect your score so to say as far as utilization like credit cards do. Well, Eq had an error for 2 installment loans and it showed the utilization at 211%. Well, I disputed because they 1 loan was paid off and had a zero balance and the other loan was refinanced for a greater amount (we did this to keep the age of the account-June 08 vs Feb 09). But Eq showed the loan amount was 700.00 and the balance was 1854.00. I know this had to have had an effect on the score. I have the gold watch monitoring with Eq and pulled a new report today and the changes have been made to reflect the correct balances. I knew it had been a month since the dispute, so that is why I pulled. So, it now shows only 1 open installment account, but 100% utilization for installment (which still isn't correct-it should be 90%), but at least they corrected the "high balance". Also, they deleted 2 old CC accounts that showed a zero balance but remarks were "bad debt, sold/transfered". Is this going to hurt the score since they took these accounts off since they showed a zero balance? I am asking because I am not sure if it counts towards the AAoA or if played a more negative impact since the remarks on the accounts. So, basically it was showing 211% util for installment and 115% for total debt ratio. And now it is showing 100% util for installment (69% for revolving-this has decreased from 111% and still some recently pif balances have not reported which shows 85% for total debt ratio. Is there any chance to receive an increase of score for this? Thanks!

Message Edited by bearcat59 on 04-20-2009 01:58 PM

[txjohn]

Installement loans do have balance-to-original loan amount ratios which affect your score.  However, it does not affect it nearly as much as CC utilization percentages.

You will get FICO gains as your installment loan is paid down, and will net best gains once you pay it below 65% of orginal loan balance.

[bearcat59]

Hi txjohn, thanks for replying! I know that installment loans do factor in credit scoring but not like cc's do. I re-read my post and noticed it sounds like I was all over the place with my post. Here are my questions:

1. Since util went from 115% to 85% for total util (installment & cc combinded) should I expect a score increase?

2. Since util on installment went from 211% to 100% should I expect a score increase?

3. There were 2 closed accounts (showing from original creditors "bad debt/collection account transferred or sold-charge off account") that were deleted, should I expect a score increase? Both of these account were "red flagged" through FICO due to the 1st account reporting 1-30 day, 1-60 day, 3-90 day lates (May 05, Apr 05, Mar 05). The 2nd account reporting 1-30 day (Jan 07), 1-60 day (Feb07).

Thanks again!

Message Edited by bearcat59 on 04-20-2009 05:20 PM

[bearcat59]

Okay, I went ahead and pulled a report from EQ and I did increase in score...+27 points! It was bugging me too bad, so I went ahead and paid to show for my own eyes to see. That was the only changes that were made since my last report. I have the daily pulls with the 3 in 1 with EQ, so I know that since my last report (04/18) those were the only changes.

Thanks!