Lel wrote: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.
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.
I guess I was wrong about what caused my scores to go down, but now I don’t know what it could have been. The AAoA impact for my new mortgage should have been very minor, since I already have a long history. It reduced it from 17 years 0 months, to 15 years 3 months. Supposedly, “FICO High Achievers have an average age of accounts between 6 and 12 years". The new INQs (total of 9 in my case) would have had an effect for a year, but the comparison I was reporting occurred about 20 months after that time. My EQ report (with the higher score) has one recent INQ that isn't on the TU report, for a new CC. That new card is being reported (with the same CL) to all three CRAs.
Starting Score: EQ 804 - (April 2009) 