cancel
Showing results for 
Search instead for 
Did you mean: 

SSL make sense when there's mortgage?

tag
SouthJamaica
Mega Contributor

SSL make sense when there's mortgage?

If one has a mostly paid down share secured loan and then gets a new mortgage, does the SSL still serve a purpose?


Total revolving limits 741200 (620700 reporting) FICO 8: EQ 701 TU 704 EX 685

8 REPLIES 8
Revelate
Moderator Emeritus

Re: SSL make sense when there's mortgage?


@SouthJamaica wrote:

If one has a mostly paid down share secured loan and then gets a new mortgage, does the SSL still serve a purpose?


It's a dirt cheap tradeline, but FICO scoring wise probably not unless there's some ratio of revolving to installment lines which is going to be hard to impossible to ever figure out on this forum anyway.

 

I did pay off my USAA cd secured loan (I plan to just close out the CD since there's better things to do with the cash and eat the 1% penalty or whatever) but I left my Alliant loan open post mortgage even though I took the expected installment utilization drop when the mortgage reported.  I think that's just personal preference and if you decide the Alliant loan is too much hassle to deal with post-mortgage then pay it.

 

I guess I'm now tempted to just pay it off and see what my score does (I would expect nothing) but I kinda like Alliant so far as a whole so I'll probably err on the side of relationship and keep it.  Someone else can test for once /shrug.




        
Message 2 of 9
SouthJamaica
Mega Contributor

Re: SSL make sense when there's mortgage?


@Revelate wrote:

@SouthJamaica wrote:

If one has a mostly paid down share secured loan and then gets a new mortgage, does the SSL still serve a purpose?


It's a dirt cheap tradeline, but FICO scoring wise probably not unless there's some ratio of revolving to installment lines which is going to be hard to impossible to ever figure out on this forum anyway.

 

I did pay off my USAA cd secured loan (I plan to just close out the CD since there's better things to do with the cash and eat the 1% penalty or whatever) but I left my Alliant loan open post mortgage even though I took the expected installment utilization drop when the mortgage reported.  I think that's just personal preference and if you decide the Alliant loan is too much hassle to deal with post-mortgage then pay it.

 

I guess I'm now tempted to just pay it off and see what my score does (I would expect nothing) but I kinda like Alliant so far as a whole so I'll probably err on the side of relationship and keep it.  Someone else can test for once /shrug.


I was just wondering if its FICO score significance is eclipsed by the presence of a much larger mortgage, and I guess it is.

 

I guess a meaningful test would be to keep it, get a much larger mortgage in place, and then at a quiet moment pay the SSL down to zero and see if it has any effect.


Total revolving limits 741200 (620700 reporting) FICO 8: EQ 701 TU 704 EX 685

Message 3 of 9
Revelate
Moderator Emeritus

Re: SSL make sense when there's mortgage?


@SouthJamaica wrote:

@Revelate wrote:

@SouthJamaica wrote:

If one has a mostly paid down share secured loan and then gets a new mortgage, does the SSL still serve a purpose?


It's a dirt cheap tradeline, but FICO scoring wise probably not unless there's some ratio of revolving to installment lines which is going to be hard to impossible to ever figure out on this forum anyway.

 

I did pay off my USAA cd secured loan (I plan to just close out the CD since there's better things to do with the cash and eat the 1% penalty or whatever) but I left my Alliant loan open post mortgage even though I took the expected installment utilization drop when the mortgage reported.  I think that's just personal preference and if you decide the Alliant loan is too much hassle to deal with post-mortgage then pay it.

 

I guess I'm now tempted to just pay it off and see what my score does (I would expect nothing) but I kinda like Alliant so far as a whole so I'll probably err on the side of relationship and keep it.  Someone else can test for once /shrug.


I was just wondering if its FICO score significance is eclipsed by the presence of a much larger mortgage, and I guess it is.

 

I guess a meaningful test would be to keep it, get a much larger mortgage in place, and then at a quiet moment pay the SSL down to zero and see if it has any effect.


That's how I would approach it.  My file isn't quiet though and I'm not inclined to close it right now but that's probably just my being awkward TBH: would almost assuredly make no real difference to my credit as I took a serious hit on the installment utilization side with the mortgage anyway... nothing else that we're aware of could've accounted for that magnitude loss on a new tradeline reporting on my file anyway.




        
Message 4 of 9
Anonymous
Not applicable

Re: SSL make sense when there's mortgage?


@SouthJamaica wrote:

If one has a mostly paid down share secured loan and then gets a new mortgage, does the SSL still serve a purpose?


The SSL absolutely served a purpose WHILE you were shopping for a home, closing on it, having it underwritten, etc.  After the home is yours, and the mortgage has begun reporting on all three bureaus, then likely not, based on the tests that others have done.

 

But, as with anything else in science, it's only a good thing when a completely different person tries to replicate a previously reported experiment.  Your idea of paying to zero after the new mortgage has appeared on all three reports strikes me as a great idea.  I have been suggesting that fo some time.

 

(I assume in this thought experiment that your SS loan is your only open installment loan -- no auto loans, etc.)

 

I would also like to see something similar done with student loans, but so far we don't have any takers -- yet.  The idea would be very similar.  Take a person who has student loans that are not in deferment, but also on which the debt is still 96% or more intact.  Then add a $500 SS loan and pay it to $44 and see what happens. 

 

Again, the assumption is that the person with the student loans has no other installment loans.

Message 5 of 9
SouthJamaica
Mega Contributor

Re: SSL make sense when there's mortgage?


@Anonymous wrote:

@SouthJamaica wrote:

If one has a mostly paid down share secured loan and then gets a new mortgage, does the SSL still serve a purpose?


The SSL absolutely served a purpose WHILE you were shopping for a home, closing on it, having it underwritten, etc.  After the home is yours, and the mortgage has begun reporting on all three bureaus, then likely not, based on the tests that others have done.

 

But, as with anything else in science, it's only a good thing when a completely different person tries to replicate a previously reported experiment.  Your idea of paying to zero after the new mortgage has appeared on all three reports strikes me as a great idea.  I have been suggesting that fo some time.

 

(I assume in this thought experiment that your SS loan is your only open installment loan -- no auto loans, etc.)

 

Yes I had the SSL and an auto loan, and when I paid off the auto loan there was no discernible change at all in my scores.

 

Now I just have the SSL.

 

I would also like to see something similar done with student loans, but so far we don't have any takers -- yet.  The idea would be very similar.  Take a person who has student loans that are not in deferment, but also on which the debt is still 96% or more intact.  Then add a $500 SS loan and pay it to $44 and see what happens. 

 

Again, the assumption is that the person with the student loans has no other installment loans.


 


Total revolving limits 741200 (620700 reporting) FICO 8: EQ 701 TU 704 EX 685

Message 6 of 9
Gmood1
Super Contributor

Re: SSL make sense when there's mortgage?

I'll see how this pans out with my daughter who only has student loans as a installment loans when she opens her SSL in a couple of months and reports back.

Maybe it's just me, but the SSL seems to act like a ballast in my scoring. Though I have no real way of knowing exactly what's going on there. I got the SSL a month before trading in one Auto (18 months of history) and acquired two new Auto loans. Fico score dipped only a few points ( 3 to 6) depending on CB.

I am for certain it does make a huge difference on Vantage scoring. Each time I've added a installment loan. The scores have moved up. Added 5 ( revolving and installment) new accounts in a month with multiple inqs. Vantage scores still stay solidly in the 800s. I have 5 active installment loans reporting currently. Mortgage, SSL, Personal loan and two Auto loans. All of them besides the mortgage were acquired this year. Mortgage is two years old. Vantage AAoA is 1.4 yrs.
Message 7 of 9
Anonymous
Not applicable

Re: SSL make sense when there's mortgage?

Hi Gmood!  I am just delighted to hear that your daughter will be performing SS Loan Test On An SL-Only Profile.  A few questions:

 

When she adds the SSL, will her student loans at that time be in deferment?

     If not, how long will they have been out of deferment?

 

Would you be willing to work with me a bit to ensure that her profile is in optimal shape for the test?  This would be very painless.  It's just that we want to avoid anything that would be a confounder in the before and and after shot.  We can just trade a few private messages if that would work for you.

Message 8 of 9
Anonymous
Not applicable

Re: SSL make sense when there's mortgage?

Regarding your ballast idea, that's certainly possible depending on whether a person had a comparatively thin profile beforehand.  Can you tell us when you added all these installment loans?  And before you did that, what was your total number of accounts?  (Closed and open, installment and revolving, all together.)  We'd also need to know your AAoA before you added all the accounts and after.

 

I have a slight concern over your use of the phrase "Vantage AAoA."  It makes me suspect tht you are getting that figure from Credit Karma.  Karma's summary software does not give the AAoA computation that either the FICO or Vantage 3.0 algorithms actually use.  The Karma summary software is very old and should have been updated long ago.  Both FICO and Vantage calculate AAoA in the exact same way.  You should also ignore whatever Karma says about your "Age of Oldest Account."

Message 9 of 9
Advertiser Disclosure: The offers that appear on this site are from third party advertisers from whom FICO receives compensation.