Some Interesting Data Points May Come My Way

[jbh]

For those that are interested in D.P, the next few weeks may be interesting. Primarily the impact of installment (non mortgage, 2 personal one auto all open recently) loans.

Simple Summary:

Obtained personal loan from Discover last month. Still not posted on credit reports. $18k loan

2 Weeks later, Realizing the APR is a mess and wanting to secure a bit more $ for my wife's business/some extra room for expenses/etc, took a loan from Penfed.

Same week, transmission died. Need new car. Penfed Auto Loan. Both loans from Penfed are $25k

Score Pre Loan Posting On Report To Posting On Reports:

So at once, with my ficos 755-779ish, 2 penfed loans report. Knocks all 3 down to 677-700. 

Extra variables: Penfed CC and Disney card also posted. Penfed cc was in conjunction with 2 loans, Disney was a few weeks later. No real impact, only a few points drop. Major dent was the 2 loans. So here's where it will be interesting; What happens when the now $16k paid out of $18k discover loan (from the penfed loan) reports?

My loan installment util is now at 100% but will eventually be 73.5 (going from $50k - 2 loans owed of $50k to $52k owed from $68 which is a util of 73.5

Not a huge knock on installment but it is interesting to see what will happen to the scores. In addition, curious if the 2 amex cards I received I applied for knock me down a bit when they report likely next month (they are new and I hear it takes 2-3 statements for them to post).

## Another Interesting D.P - For Utilization ##

Today I experienced the AZEO, where only one card is reporting a balance. 0 point gain so far on my ficos once it went from 2 with a balance to one left. Found that interesting. I would have though that would provide a small bump. Mind you the collective and per card util are always < 9% so I realize that is the meat of the up/down swing but still surprised hitting AZEO means nothing.

No collections/etc/etc on my reports. Last 'lates'/baddies are 2+ years. Feel free to ask q's, I also will update if anybody is interested when the nearly paid off loan and 2 new cc's hit.

[Anonymous]

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@jbh wrote:

So at once, with my ficos 755-779ish, 2 penfed loans report. Knocks all 3 down to 677-700. 

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I don't think I've ever heard of 2 new accounts knocking a credit score down from 755-779 (excellent score) to 677-700.  That's a 55-102 point drop.  Many people can add 10 new accounts and not experience such a drop.  Is your file extremely young/thin?  I'm having trouble wrapping my head around why you'd see such a drastic drop.

[jamie123]

Great post!

Yes, I'm interested in how it turns out for you. I'm in a similar situation with 5 new accounts in the past year and FICO has hammered my scores down. I do however think that once these accounts have aged a year my scores should rebound. (Well, at  least I hope so!)

In the past year I have:

1 new auto loan

1 new mortgage

3 new credit cards

I took hits for all the HPs, new accounts and it knocked my AAoA down to just under 3 years. Two of the new credit cards had 0% offers that I'm taking advantage of so I am running high balances on those cards which muddies the waters where my scores are concerned. This February when the 0% offers expire I will pay off the CCs and be able to hopefully recover most of the 60 points I was hammered down.

[Anonymous]

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@jamie123 wrote:

I took hits for all the HPs, new accounts and it knocked my AAoA down to just under 3 years. Two of the new credit cards had 0% offers that I'm taking advantage of so I am running high balances on those cards which muddies the waters where my scores are concerned. This February when the 0% offers expire I will pay off the CCs and be able to hopefully recover most of the 60 points I was hammered down.

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So, the 60 points you lost... were they in part due to high utilization?  If so, what percentage of that loss to you attribute to utilization what what percentage to the inquiries/new accounts?  You opened 5 new accounts and lost 60 points.  That's quite different than the OP that opened 2 accounts and says he lost 55-102 points.

[jamie123]

It is really hard for me to know where the point nicks are coming from because I have had a lot going on in my report during this time. I would however estimate my point loss is probably 50/50. 30 points lost for high UTI and 30 points lost for new accounts and HPs.

[jbh]

BBS,

To answer your question, even though I applied for a few cards at the same time as the first Discover loan, 2 of them have yet to report (Amex) and the newer one that did (Chase) came after that score drop. It was the 3 Penfed accounts (2 loans and one cc) that came at the time of that major drop.

I had a very thin file before and I also am sure AAoA hit was part of it. I went from 7.25 including 2 closed accounts (4 total, very thin file) to 4 AAOA. I think I lost a few when chase posted and then amex is all that is left from CC's and still waiting for Discover Loan. I had 0 installment loans at all, open or closed, before all of this.

[Anonymous]

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@jamie123 wrote:

It is really hard for me to know where the point nicks are coming from because I have had a lot going on in my report during this time. I would however estimate my point loss is probably 50/50. 30 points lost for high UTI and 30 points lost for new accounts and HPs.

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I think that's a reasonable assessment.  If I had to guess I'd say the utilization played a larger factor, but like you said it's difficult to quantify with multiple things going on.

[Anonymous]

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@jbh wrote:

BBS,

To answer your question, even though I applied for a few cards at the same time as the first Discover loan, 2 of them have yet to report (Amex) and the newer one that did (Chase) came after that score drop. It was the 3 Penfed accounts (2 loans and one cc) that came at the time of that major drop.

I had a very thin file before and I also am sure AAoA hit was part of it. I went from 7.25 including 2 closed accounts (4 total, very thin file) to 4 AAOA. I think I lost a few when chase posted and then amex is all that is left from CC's and still waiting for Discover Loan. I had 0 installment loans at all, open or closed, before all of this.

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I would say the fact that your file was so thin was the major factor here.  An AAoA drop from 7 years to 4 years is significant, but not deadly to a profile.  Going from no installment loan at all to having an installment loan or loans on your credit report would actually help your score slightly, as it satisfies the "credit mix" sector.  The biggest benefit from the loans of course comes when they are almost all paid off (down to 8.99% or less of original balance).

[Thomas_Thumb]

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@jbh wrote:

For those that are interested in D.P, the next few weeks may be interesting. Primarily the impact of installment (non mortgage, 2 personal one auto all open recently) loans.

Simple Summary:

Obtained personal loan from Discover last month. Still not posted on credit reports. $18k loan

2 Weeks later, Realizing the APR is a mess and wanting to secure a bit more $ for my wife's business/some extra room for expenses/etc, took a loan from Penfed.

Same week, transmission died. Need new car. Penfed Auto Loan. Both loans from Penfed are $25k

Score Pre Loan Posting On Report To Posting On Reports:

So at once, with my ficos 755-779ish, 2 penfed loans report. Knocks all 3 down to 677-700. 

Extra variables: Penfed CC and Disney card also posted. Penfed cc was in conjunction with 2 loans, Disney was a few weeks later. No real impact, only a few points drop. Major dent was the 2 loans. So here's where it will be interesting; What happens when the now $16k paid out of $18k discover loan (from the penfed loan) reports?

My loan installment util is now at 100% but will eventually be 73.5 (going from $50k - 2 loans owed of $50k to $52k owed from $68 which is a util of 73.5

Not a huge knock on installment but it is interesting to see what will happen to the scores. In addition, curious if the 2 amex cards I received I applied for knock me down a bit when they report likely next month (they are new and I hear it takes 2-3 statements for them to post).

## Another Interesting D.P - For Utilization ##

Today I experienced the AZEO, where only one card is reporting a balance. 0 point gain so far on my ficos once it went from 2 with a balance to one left. Found that interesting. I would have though that would provide a small bump. Mind you the collective and per card util are always < 9% so I realize that is the meat of the up/down swing but still surprised hitting AZEO means nothing.

No collections/etc/etc on my reports. Last 'lates'/baddies are 2+ years. Feel free to ask q's, I also will update if anybody is interested when the nearly paid off loan and 2 new cc's hit.

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Wow - A thin file taking on 3 new loans and 2 credit cards All those new accounts first reporting is a big deal for Fico.

A score drop of up to 100 points short term is not all that unusual. Once you make a couple payments on your loans and the new CCs have reported and show use/payment, report an aggregate UT under 9%, a majority of the points should be regained. 

It will be interesting to see how your scores change over the next 60 to 90 days.