What the F!!!!

[Anonymous]

This scoring stuff is wrong. (And "F" stands for fudge... what happened to my shorts when I saw this 22 point drop!)

We just made the last payment on our 3 year auto lease and Experian dumped my score by 22 points! What  is that? Your scores are lowered if you pay credit down in big chunks, It hurts if you start using a card after a while, even when you're at less than 20% credit to debt ratio, and apparently hurt if you pay credit off over time showing you can manage your credit. I am beyond pissed and fed up with this rigged game. 

I understand being upset but please do not try to circumvent the site's profanity filter. Thank you for your understanding and cooperation.

Irish80
MyFICO Moderator

I hear what you are saying Irish80. Just to be clear, I was not trying to circumvent anything. I purposely did not use curse words. At the same time, I wanted to express my profound anger and frustration at this rigged and inequitable scoring system so I did so in a way that got my point across without using forbidden words. If we're going to have honest dialog about this stuff, that can get a little messy sometimes.

[Glen_M]

An active, but low (< 9%), remaining balance gives the best scoring when you have one installment loan.  There are plenty of people here who maintain an "artifical" loan just to keep an active installment loan with a low remaining percentage balance "on the books" to get a 30 point boost to their scores (usually a secured loan for $500, with $40 left in payments, not due for years).

Many things in credit scoring don't make practical sense.  Much like a video game there are rules or mechanics to credit scoring that make no sense but the end result gives the people writing the rules the outcome they're looking for; and if you learn what those quirks are and 'play' within those nonsensical 'rules' you can gain a significant advantage to accomplish the things that actually matter to you too.

[Anonymous]

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@Anonymous wrote:

This scoring stuff is wrong  

We just made the last payment on our 3 year auto lease and Experian dumped my score by 22 points! What  is that? Your scores are lowered if you pay credit down in big chunks, It hurts if you start using a card after a while, even when you're at less than 20% credit to debt ratio, and apparently hurt if you pay credit off over time showing you can manage your credit. I am beyond pissed and fed up with this rigged game. 

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Hi rickdeet.  Welcome to the forums! 

The good news is that it is easy to get those points back.  We can point you toward a discussion thread that shows exactly how to do that, and which at the same time will help you undeerstand how FICO 8 scores installment loans.

The folks here can also show you how to manage your credit cards (different issue from loans) so that you get the most scoring points out of them.

Both things are really easy to do, though the methods are not always obvious to newcomers.  We can make it really painless.

Let us know if you want further help.

[Anonymous]

Hi new to the forum.
So is there a link to the discussion thread on installment loans?
Thank you

[Anonymous]

First 2-3 posts are all you need.

http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Adding-an-installment-loan-the-Share-Secu...

[Anonymous]

Thanks for the info

[Anonymous]

Thanks for the tips... what burns me most with this 22 point drop is that it was a car LEASE and it's not like we had a choice to keep it open. Besides, what shows more responsibility in managing credit than taking out a loan and paying it on time every month for three years?? I really hate Experian. They are the bane of my existence right now. 

[Anonymous]

While you definitely proved your creditworthiness with that loan over the last 3 years, unfortunately the FICO algorithm doesn't know if you are able to replicate the same behavior today if you had another loan in place.  Who knows, you could have lost your job, incurred massive medical expenses, etc. since paying off the first loan which would prevent you from being able to manage an installment loan the same way today.  This is sort of how I make sense of the point drop and why FICO needs to see a loan that currently has payments being made on it.

[Anonymous]

So pre-emptively screwing me by dumping my score is their response? That's like putting someone in jail because they maybe, might possibly commit a crime. How about letting my actions speak for themselves?

Along with this lease ending, I just paid down a lot of debt over a one month period and went from 75% credit utilization down to 20%. Too bad their algorithm isn't smart enough to take a wholistic approach. 

I get it's a game, and I am forced to play the game. It just really sucks that it's rigged.

[Anonymous]

It's not rigged.  If you go from having no open installment loan to having one (at high utilization) you get a slight score increase for having one.  Then when it's almost paid off, you get a much greater score increase.  Once it's closed, you've returned your profile to the same state it was originally in (no open installment loan) so it is viewed as it was prior to getting that installment loan [with respect to credit mix].

You bring up credit utilization.  Utilization responds the same way.  You just paid down your utilization from 75% to 20%.  No doubt you saw a nice score increase from that.  If you returned your profile to it's previous state, that is, taking your utilization back up from 20% to 75% no doubt you understand that your scores will drop by the amount they went up from your recent paydown.  Why?  Because you're returning your profile to the previous state that produced those scores.  The same thing goes for an installment loan.  There's no memory with these things.  The algorithm can't say "well, he DID just pay down utilization from 75% to 20%, so we're still going to give him some credit for that even though his utilization is back up at 75% now."

Nothing here is rigged.  You just need to be a bit more open minded and understanding of how the system works.  The only thing "rigged" would be the gaming technique involving the SSL, which allows anyone to never lose points for paying off an installment loan, thus making this entire conversation/debate irrelevant.