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Lel
Posts: 5,262
Registered: ‎03-18-2008
Re: How # of cards with balance can effect FICO score

‎03-23-2012 12:34 PM

crunching_numbers wrote:
Wait, is the SIZE of my mortgage factored into my FICO??!!!   I live where houses cost more. That does not seem fair.

Am I being penalized for doing a Re-fi? I  refi'd with no cash out, so my mortage started over with 100% due, nothing paid off. Are you penalized for % paid/not paid  too? I am not even underwater...  again not fair.

 

It will be years until a new mortgage gets a good ratio. :smileyfrustrated:

 

Please tell me I am misunderstanding this tidbit of information.


Installment loan balances have a very small effect on FICO score, if any.  I, too, live in an area in which basically everyone has jumbo loans, so I would be annoyed if this had a major effect on scores.  It doesn't.

 

The primary negative FICO pressure of a refinance is not that you've reset the loan to "100%" utilization, but rather because there's a new account reporting, a new inquiry associated with the loan application, and a possible effect on average account age.  However, in my experience the effect is temporary.  When I refinanced a home equity loan, there was a small drop in my FICO scores, but within a few weeks it was back where it had been for a while.  As I have paid down my loans, there really hasn't been any effect on FICO scores.  My credit card balances are what drive the small fluctuations in score.

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