Sorry mods for the double post, but didn't seem to be getting any feedback in the student loan section...
My student loan has been deferred since I finished grad school back at the end of the summer of 2015. I received a notice that my first payment is due 4/1/16. All that is fine, but then I received a notice from myFICO this morning that my student loan information updated and my Experian score dropped 30 points! From 747 to 717. Could not come at a worse time as I'm about to go through the pre approval process for buying a new home in April and have been trying to get all my ducks in a row. These are my FICO 8 scores but I would presume my mortgage scores would also drop (EXP mortgage score was 725 last week).
Anyone know why there would be such a dramatic drop in score simply for a loan updating? Nothing else has changed in my profile (as far as I can tell)....
@Dw4250 wrote:Sorry mods for the double post, but didn't seem to be getting any feedback in the student loan section...
My student loan has been deferred since I finished grad school back at the end of the summer of 2015. I received a notice that my first payment is due 4/1/16. All that is fine, but then I received a notice from myFICO this morning that my student loan information updated and my Experian score dropped 30 points! From 747 to 717. Could not come at a worse time as I'm about to go through the pre approval process for buying a new home in April and have been trying to get all my ducks in a row. These are my FICO 8 scores but I would presume my mortgage scores would also drop (EXP mortgage score was 725 last week).
Anyone know why there would be such a dramatic drop in score simply for a loan updating? Nothing else has changed in my profile (as far as I can tell)....
Well the bright spot is installment loan ratios don't change EQ 04 / TU 04 at all, and that's 2/3 of the mortgage trifecta. Yes EX 98 though does follow 08 with regards to this so you might take a ding there as I'm assuming this was installment utilization.
That's a really interesting datapoint; what was the tradeline status reporting as previously and what is it now?
Also if you had other installment lines what was their current balance vs. original balance, and how much more did that change with the student loan? Guessing there may have ben some status where it wasn't being counted in the calculation, but you'll need to look at the reports and see what changed explicitly on this as it is possible that it was something else entirely that the monitoring solution didn't catch as a trigger and you're just now seeing the score rolled up with the tradeline change.
When you say the loan "updated", what precisely do you mean?
Thanks Relevate- I will see what the TU and EQ come in as once the account updates and report back and if i cannot ascertain the reason, I will pull a 3B report and report back.
By update, I mean the status changed from deferred to regular installment loan.
@Dw4250 wrote:Thanks Relevate- I will see what the TU and EQ come in as once the account updates and report back and if i cannot ascertain the reason, I will pull a 3B report and report back.
By update, I mean the status changed from deferred to regular installment loan.
Yeah that's what I figured thank you for confirming that. What I was thinking was that if it was deferred it wasn't being counted. That might even make sense from a risk analysis perspective when it comes to installment utilization (ratios / utilization, guess we need to standardize on a term).
I don't think I have ever noticed a difference when a loan was in deferment. It still showed up in my loan amount. I can actually check this again since I had a deferment approved today on a loan.
@BallBounces wrote:I don't think I have ever noticed a difference when a loan was in deferment. It still showed up in my loan amount. I can actually check this again since I had a deferment approved today on a loan.
Depends what else is there for your installment history and whether it's counted under FICO 8 for installment ratios or not. For example, if I had a set of student loans at 60k/60k in deferrment, in addition to my mortgage at 140k/240k, if they counted now coming out of deferrment on my current file I'd lose around 6 points. On the other hand, if that mortgage was at 230k/240k, then the addition of the student loan debt in an aggregate utilization calculation, wouldn't make any difference in the slightest on that metric anyway.
Or if like when my mortgage landed, I had the petite but pretty Alliant installment loan sitting at $44/500, and 60k/60k student loan came out of deferrment, poof there goes my 20-24 points again dependant on bureau.
On the flipside if I had no other installment loans, it'd be flat. So depends what you have first to be able to really predict the change if any when the loan changes state.
@Revelate wrote:
@BallBounces wrote:I don't think I have ever noticed a difference when a loan was in deferment. It still showed up in my loan amount. I can actually check this again since I had a deferment approved today on a loan.
Depends what else is there for your installment history and whether it's counted under FICO 8 for installment ratios or not. For example, if I had a set of student loans at 60k/60k in deferrment, in addition to my mortgage at 140k/240k, if they counted now coming out of deferrment on my current file I'd lose around 6 points. On the other hand, if that mortgage was at 230k/240k, then the addition of the student loan debt in an aggregate utilization calculation, wouldn't make any difference in the slightest on that metric anyway.
Or if like when my mortgage landed, I had the petite but pretty Alliant installment loan sitting at $44/500, and 60k/60k student loan came out of deferrment, poof there goes my 20-24 points again dependant on bureau.
On the flipside if I had no other installment loans, it'd be flat. So depends what you have first to be able to really predict the change if any when the loan changes state.
I understand how the loans could impact the balance ratio metric and therefore score. I am saying that I don't think deferrment status has ever changed the way my loans reported to the CRAs. Whether in deferment or not, I think they have always reported the full value. (I could be wrong and should be able to check)
@BallBounces wrote:
@Revelate wrote:
@BallBounces wrote:I don't think I have ever noticed a difference when a loan was in deferment. It still showed up in my loan amount. I can actually check this again since I had a deferment approved today on a loan.
Depends what else is there for your installment history and whether it's counted under FICO 8 for installment ratios or not. For example, if I had a set of student loans at 60k/60k in deferrment, in addition to my mortgage at 140k/240k, if they counted now coming out of deferrment on my current file I'd lose around 6 points. On the other hand, if that mortgage was at 230k/240k, then the addition of the student loan debt in an aggregate utilization calculation, wouldn't make any difference in the slightest on that metric anyway.
Or if like when my mortgage landed, I had the petite but pretty Alliant installment loan sitting at $44/500, and 60k/60k student loan came out of deferrment, poof there goes my 20-24 points again dependant on bureau.
On the flipside if I had no other installment loans, it'd be flat. So depends what you have first to be able to really predict the change if any when the loan changes state.
I understand how the loans could impact the balance ratio metric and therefore score. I am saying that I don't think deferrment status has ever changed the way my loans reported to the CRAs. Whether in deferment or not, I think they have always reported the full value. (I could be wrong and should be able to check)
Ah my bad!
DW420: Any chance you could post the explicit before and after tradeline details in terms of loan type, responsibility, etc ?