New car loan reported - point hits small

[Anonymous]

So it popped up on EX for a total of a -5 point loss (749 > 744), no worries.

Popped up on EQ today and only dropped -1 point (776 > 775).

Has not announced itself on TU as of this post.

My question:  Only taking a hit of -1 on EQ, is that due to my file finally getting thicker and aged?

[Anonymous]

Great insight about age and thickness.  Here's a good way to think of it.

One effect of a new account is that your AAoA goes down.  But a decrease in AAoA does not in itself have to cause a score drop.  Because FICO only looks at the integer part of your AAoA.  For example, if your AAoA was 2.7 and a new account caused caused your AAoA to to 2.2, then the number "2" didn't change.  So there was no score loss (in that example) due to the AAoA drop.  (Even when the integer value DOES change, if it is a high number there still may be no score impact.)

The thicker your profile is, the smaller the drop in AAoA is, and therefore the smaller the chance that you will cross over an integer line.  So there is a connection in a way with the thickness of your profile and your ability to absorb the age impact.

We can't say much more than that unless you calculate what your AAoA was before the car loan was added and then again after.

Also, can you clarify for us whether this car loan was the only loan, closed or open, on your report?  If it was your first installment loan, then you are gaining points in the Credit Mix category, one more reason why your scores may not have changed much.

[Grafton88]

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@Anonymous wrote:

So it popped up on EX for a total of a -5 point loss (749 > 744), no worries.

Popped up on EQ today and only dropped -1 point (776 > 775).

Has not announced itself on TU as of this post.

My question:  Only taking a hit of -1 on EQ, is that due to my file finally getting thicker and aged?

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Congrats on the new car.  Could you tell us how thick and aged your file is?  Just your AAoA and # of CCs and installment loans.  Thanks.

[Anonymous]

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@Grafton88 wrote:

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@Anonymous wrote:

So it popped up on EX for a total of a -5 point loss (749 > 744), no worries.

Popped up on EQ today and only dropped -1 point (776 > 775).

Has not announced itself on TU as of this post.

My question:  Only taking a hit of -1 on EQ, is that due to my file finally getting thicker and aged?

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Congrats on the new car.  Could you tell us how thick and aged your file is?  Just your AAoA and # of CCs and installment loans.  Thanks.

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Thank you.

The car loan is the second installment loan on my file (previous installment loan was 10 months old and now 99% paid off). 

6 active credit cards (obviously only one reports a balance). 

AAoA ranges from 2 years 8 months to 3 years 1 month.

[Anonymous]

Hello Missing.  Thickness is determined by considering all accounts, closed or open.  Sounds like Grafton is trying to help you assess that.  Therefore you'll need to give G your total number.  Right now he doesn't know that, since you only gave us open CCs (you did not tell us if you had any closed CCs).  Here's a summary of what is needed:

Open installment accounts: 2

Closed installment accounts:0

Open revolving accounts: 6

Closed revolving accounts:

I filled in what I am pretty sure the answers are to three of the four, though you should make sure I am right about that.  We need that fourth number.

Can you tell us four more things? 

Original amount borrowed for the old car loan:

Current amount owed for the old car loan:

Original amount borrowed for the new car loan:

Current amount owed for the new car loan:

Once you have all four of these numbers, we will be able to help you assess something called "total installment utilization."  Knowing what is now, and then what it will be if you decide to pay off the old car loan, will help you understand your score now and what it might be should you pay off your oldest car loan. 

[Grafton88]

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@Anonymous wrote:

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@Grafton88 wrote:

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@Anonymous wrote:

So it popped up on EX for a total of a -5 point loss (749 > 744), no worries.

Popped up on EQ today and only dropped -1 point (776 > 775).

Has not announced itself on TU as of this post.

My question:  Only taking a hit of -1 on EQ, is that due to my file finally getting thicker and aged?

---

Congrats on the new car.  Could you tell us how thick and aged your file is?  Just your AAoA and # of CCs and installment loans.  Thanks.

---

Thank you.

The car loan is the second installment loan on my file (previous installment loan was 10 months old and now 99% paid off). 

6 active credit cards (obviously only one reports a balance). 

AAoA ranges from 2 years 8 months to 3 years 1 month.

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Thanks for posting these data points.  I wonder how much your nearly paid off installment loan helps you with this minimum drop?

I am going to lease a car later this month.  My AAoA is much shorter.  I only have 4 cards active with 2 showing a small balance.  I do have one nearly paid off installment loan.  I am looking at perhaps a 20 point hit because of my thin file.  I am willing to take the hit for a new car.

[Anonymous]

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@Anonymous wrote:

Hello Missing.  Thickness is determined by considering all accounts, closed or open.  Sounds like Grafton is trying to help you assess that.  Therefore you'll need to give G your total number.  Right now he doesn't know that, since you only gave us open CCs (you did not tell us if you had any closed CCs).  Here's a summary of what is needed:

Open installment accounts: 2

Closed installment accounts:0

Open revolving accounts: 6

Closed revolving accounts:

I filled in what I am pretty sure the answers are to three of the four, though you should make sure I am right about that.  We need that fourth number.

Can you tell us four more things? 

Original amount borrowed for the old car loan:

Current amount owed for the old car loan:

Original amount borrowed for the new car loan:

Current amount owed for the new car loan:

Once you have all four of these numbers, we will be able to help you assess something called "total installment utilization."  Knowing what is now, and then what it will be if you decide to pay off the old car loan, will help you understand your score now and what it might be should you pay off your oldest car loan. 

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According to my reports under EQ it shows a total of 17 revolving accounts.  It also shows a total of 6 installment accounts.

Amount borrowed for new car is $28K, have not made the first payment yet (doing so today) so that is the balance.

Other installment loan was for $10K and currently owe $900.

EDIT:  Quite confused as I just received a refresh from EX that gives me Fico 8 for all (3).

Showed EX at 744, which is what I was notified of when the loan initially posted. 

@BUT, now it shows TU @ 780 and EQ @ 783.  I checked to be sure and it did lower my AAoA to EX at 2.5 years, TU 2.2 years, and EQ to 2.8 years.

Nothing fell off or such.  My only baddie goes away 3/2017.

Confused for sure but happy with the results. 

EDIT 2:  Believe this is a glitch in the matrix.  I did a refi of this loan with WF.  It shows up and shows a payment history going back to 2012, so this will certainly self-correct I imagine once the first payment posts.

EDIT 3:  lol, I think I figured it out (or maybe).  The $10K installment loan was sitting on a balance of 64% last month reporting and reporting this month the balance is just under 10%.  Could this be the extra points?

[Grafton88]

I think your edit #3 could be the reason for the point boost.  I got a nice bump when my loan was paid down from 18% to 9%.

[Anonymous]

It's not possible to make even semi-reliable guesses about what's happened with your scores without knowing a lot more about your reports and what has changed on them and when the changes have occured.

We could go down that path if you want (where I ask a lot of questions) but you may not really be that interested (which is fine of course).  What may be interesting you more is just general advice about what to do moving forward.  Happily, here a lot more can be said with confidence:

About your older (but still open) car loan:

*  If your lender will allow you to keep it open for the full length of the loan, and if that won't cost you any significant extra money, then keep it open.  Doing so will keep your "total installment utilization" lower.  TIU is calculated by considering all of your open loans.  You add up all the amounts you currently owe, and divide that numbrt by the sum of what all the loans were originally for.  It's very much like total revolving utiliization -- but instead just for installment loans.

About your newer car loan:

* Same idea as above.

NOTE;

If your first loan closes, then your TIU will be determined solely by the newer car loan.  That's why, if it can be done without any hitch, it's nice to be able to keep installment loans open but mostly paid off, rather than paying them off entirely.

Your credit cards:

* Pay them in full (just general good practice) each month.

* Keep each of them under 49% utilization (considered individually).

* Keep your total CC utilization under 29% most months if you can.

* 30 days before a major need for credit, pay all CCs down to $0 and keep them there; except for one CC which should report a smallish balance.