Interesting Data Point - paid off Chase Auto Loan

[StartingOver10]

This was the only open installment on my credit -all other installments have been paid off. This auto loan from Chase paid off two weeks ago. Today Experian reports an 11 point drop on MyFICO alerts (FICO version 8) because I have no open installment loans now. 720 to 709  

I knew it was coming so I nursed that loan for as long as possible. What is interesting is that the payoff was reported early. Typically, this tradeline reports on the 9th and today is the 3rd. 

[Thomas_Thumb]

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@StartingOver10 wrote:

This was the only open installment on my credit -all other installments have been paid off. This auto loan from Chase paid off two weeks ago. Today Experian reports an 11 point drop on MyFICO alerts (FICO version 8) because I have no open installment loans now. 720 to 709  

I knew it was coming so I nursed that loan for as long as possible. What is interesting is that the payoff was reported early. Typically, this tradeline reports on the 9th and today is the 3rd. 

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Thanks for the data point.

Sorry for your loss. At least is wasn't the 30 point loss others have reported after closing their last open installment loan.

[StartingOver10]

Agreed. Can't wait to see what TU and EQ do though 

Although it is very nice to not have a payment

[SouthJamaica]

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@StartingOver10 wrote:

This was the only open installment on my credit -all other installments have been paid off. This auto loan from Chase paid off two weeks ago. Today Experian reports an 11 point drop on MyFICO alerts (FICO version 8) because I have no open installment loans now. 720 to 709  

I knew it was coming so I nursed that loan for as long as possible. What is interesting is that the payoff was reported early. Typically, this tradeline reports on the 9th and today is the 3rd. 

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Well, let's not lose sight of the forest for the trees..... congratulations

[Revelate]

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@StartingOver10 wrote:

This was the only open installment on my credit -all other installments have been paid off. This auto loan from Chase paid off two weeks ago. Today Experian reports an 11 point drop on MyFICO alerts (FICO version 8) because I have no open installment loans now. 720 to 709  

I knew it was coming so I nursed that loan for as long as possible. What is interesting is that the payoff was reported early. Typically, this tradeline reports on the 9th and today is the 3rd. 

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Alliant or similar reinder game abusable lender is calling your name my friend

Interest paid year to date: $1.36

Just saying, for less than a Big Mac a year you can sort that lack of installment loan!

[StartingOver10]

Lol Rev, you bet Alliant is calling my name

Believe me, I have been thinking about it. I guess I should have pulled the trigger a month or two before the payoff but have been distracted with planning my daughters' wedding that we had two weeks ago. It is one of the reasons I'm so debt-heavy now (35%). 

I will get off a dime and do it - the minute Hurricane Matthew finishes with Fl....

[Anonymous]

11 points is no big deal.  Unless you aren't apping for credit any time in the near future I wouldn't bother personally with the share secure loan technique... but if you could see yourself needing to in the next year it would certainly be worthy of consideration.  Even without adding an installment loan, just gardening for the next year would likely bring your scores up to that optimal 730-740 range anyway which leaves you in a very good place.

[StartingOver10]

Just received another MyFICO alert.  My TU 8 score just dropped 17 points due to the installment loan payoff. It went from 729 down to 712.  That's a pretty hefty hit.  

I'm not going for additional credit in the next 6 months or so. I do expect to recover some of these points when I pay down my heavy debt - even without an open installment loan. If I don't see decent recovery (730 to 750) in the next few months, then I will add the Alliant loan rather than going for it right away. My intention is to pay off the wedding debt in the next 3 months and get the rest under 9% within 6 months if I need that amount of time. 

[Anonymous]

Hey StartingOver!  In the couple months before you paid off the Chase auto loan, was the amount owed very small compared to the amount of the original loan?

I am guessing that the answer is yes, since you said you stretched out the life of the auto loan as long you could.

If so, it is a puzzle to me that your drop was only 17 points.  Lots of people get a bonus of 30 points when they do the SS loan trick, and that includes people who already had a closed installment loan.  The flip side of that is a similar loss when you go from one open loan with a total installment util < 9% to no open loans.

[StartingOver10]

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@Anonymous wrote:

Hey StartingOver!  In the couple months before you paid off the Chase auto loan, was the amount owed very small compared to the amount of the original loan?

I am guessing that the answer is yes, since you said you stretched out the life of the auto loan as long you could.

If so, it is a puzzle to me that your drop was only 17 points.  Lots of people get a bonus of 30 points when they do the SS loan trick, and that includes people who already had a closed installment loan.  The flip side of that is a similar loss when you go from one open loan with a total installment util < 9% to no open loans.

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Yes, it was very small. Usually, I pay off a vehicle loan when it hits the $5k mark. This is the first time I continued making just the regular payment up to the end with the final payment slightly higher to pay off the balance. I did that this time to see if there really is an impact to not having an open installment loan after seeing all the discussion on it here.  The 17 point loss was just on TU. The day before EX had lost 11 points. EQ hasn't reported yet.  Do you typically report the point loss across all three CRAs? If so, it will easily be more than 30 points lost over 3 by the time EQ reports.