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Registered: ‎10-30-2007
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loan balances

if loan balances account for 30% of the "fico" score and if "high balances" are considered detrimental to the total score, how is income accounted for in terms of what constitutes a high balance?
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Posts: 4,596
Registered: ‎09-14-2007
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Re: loan balances

It's not. Income is not counted anywhere in the Credit Report or Credit Scores models.
"Never ever, ever be late. Never" (FUTR)
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Registered: ‎03-12-2007
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Re: loan balances



lunasea2 wrote:
if loan balances account for 30% of the "fico" score and if "high balances" are considered detrimental to the total score, how is income accounted for in terms of what constitutes a high balance?



As sylvia said income does not factor in FICO scoring. This 30% you're asking about applies mostly to revolving balances and not installment loans. In FICO scoring there are utilization percentage calculations for both revolving accounts (credit cards, lines of credit and sometime home equity lines of credit) and installment accounts (auto, student loan, personal and etc. but mortgages are excluded). Keep in mind revolving util% calculations carry considerably more weight in FICO scoring than installment util% calculations, it's not even close.
 
Furthermore, FICO scoring has two types of revolving util%: one which looks at util% on each revolving account and the second which looks at your cumulative util% on all revolving lines. Both are important and carry similar weight.
 
In sum, if given the choice between having used 90% util on CCs versus any installment with over 90% of the loan outstanding, I would much rather have the later reporting on my reports. With revolving accounts it's about low util and paying on time versus installment accounts which is about paying on time.
Credit Profile -
FICO 08 Scores (11-08-2014): EQ 818, EX 817, TU 822
All three scores were 850. Lost points for not having an open installment TL. So, BE WARNED!!!!!
Credit History: 26+ years ~ AAoA: 12 years ~ Util: 1% ~ Inqs: EX 1

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