topic Re: Util and car loan in Credit Cards

Util and car loan

Anonymous — Mon, 02 Jun 2008 17:27:38 GMT

ok i was wondering, does fico consider a car loan(i.e installment account) part of util or is util strictly limited to revolving accounts like credit cards? I was wondering about this because after i got my new car financed by Toyota Financial Services 2 months ago and got 2 new cc my fico scores took a gigantic nose dive, I was in the middle 600 now i am very low 600's

also, i do have ALOT of iqs for this year, mostly all on EX.

But still, does the score count car loans as util, or on credit cards.

here is the breakdown

Toyota Financial 18000k

Chase Visa 900/1000CL

Sears MC 600/4000CL

Wamu MC 0/2000Cl

Wamu Visa 0/1750CL

Juniper 0/2000CL

Target Visa 0/5000CL

so, does car loan count as part of util or or only CC?

Re: Util and car loan

Anonymous — Mon, 02 Jun 2008 17:31:06 GMT

NO UTIL is with CCs (revolving)

Re: Util and car loan

Anonymous — Mon, 02 Jun 2008 17:39:45 GMT

From what I've read on here it could be that chase CC that is making your score go down. I've read when you have a card over 85% of CL the consider it maxed out. Vicki

Re: Util and car loan

Anonymous — Mon, 02 Jun 2008 17:42:53 GMT

yeah, that could be true. i think i did read about that as well.

i guess after i pay on it for awile, score will rise right?

also, as car balance goes down, score go up, right?

Re: Util and car loan

Anonymous — Mon, 02 Jun 2008 18:05:25 GMT

I don't know if it works like that on a car loan, however the age of the loan will help. So when the inquiry is one year old it will not hurt as much plus then you will have 12 mths of good payment history.

Most of the fico is util and history, average age of accounts and balances vs available limits. But on auto loans it does not work like that it is the way i stated above. Good Luck Vicki

Re: Util and car loan

Anonymous — Mon, 02 Jun 2008 18:12:33 GMT

FICO scores both revolving utilization and installment utilization, but it scores them separately. They are not lumped together into one utilization calculation.

Revolving utilization accounts for a much larger piece of the scoring pie than does installment utilization.

Yes, as you pay an installment loan down, you will be scored better on installment utilization. Whether this will translate into actual score increases is anyone's guess, however, since that piece of the puzzle is so small and hardly worth even worrying about.

Re: Util and car loan

Anonymous — Mon, 02 Jun 2008 18:46:32 GMT

yes, that was what i was wondering about cheddar. you answered my question. I didnt know if it was one big lump util score or not. so, its done differently.

so, basically, the revolving util is more important on score than the car loans, correct?

I know the car loan is important, but overall, the fico weighs more heavily on CC then?

correrct me if i'm wrong, but how can a car loan be considered utility? its not actually used like a cc, everything is basically fixed, whereas a CC is always fluctuating. I guess its just scored on a lesser scale right? I mean, its not the biggest part of the scoring, correct?

Re: Util and car loan

Anonymous — Mon, 02 Jun 2008 18:50:35 GMT

bcnu176 wrote:

so, basically, the revolving util is more important on score than the car loans, correct?

Correct.

I know the car loan is important, but overall, the fico weighs more heavily on CC then?

Yes.

correrct me if i'm wrong, but how can a car loan be considered utility?

For an installment loan, utilization is calculated as the ratio of the current balance to the original amount of the loan. As you pay the loan down over time, your utilization on that account will continue to improve over the period of the loan.

It's also worth noting that installment utilization only includes non-mortgage accounts.

I guess its just scored on a lesser scale right?

If by "lesser scale" you mean it's not as important as revolving utilization, then yes.

I mean, its not the biggest part of the scoring, correct?

Correct.

Re: Util and car loan

Anonymous — Mon, 02 Jun 2008 18:53:38 GMT

wow, thanks alot. I wish I knew as much as you and the other people here. if i knew half as much as you, id have a better score.

I wish i knew about myfico a few years ago......

thanks for everyones help.

Re: Util and car loan

haulingthescoreup — Mon, 02 Jun 2008 19:10:55 GMT

@Anonymous wrote:

wow, thanks alot. I wish I knew as much as you and the other people here. if i knew half as much as you, id have a better score.
I wish i knew about myfico a few years ago......
thanks for everyones help.

Take the phone off the hook, ignore your family, don't do any housework, and sneak onto the forums during your workday --do this for 5 or 6 months, and you'll find yourself a mod!

Re: Util and car loan

Anonymous — Mon, 02 Jun 2008 19:43:27 GMT

@Anonymous wrote:

For an installment loan, utilization is calculated as the ratio of the current balance to the original amount of the loan. As you pay the loan down over time, your utilization on that account will continue to improve over the period of the loan.

Wait, so does this mean, if you had an installment loan for a car that started at 20k, had it paid down to 10k, and then refinanced the loan at a better rate with another company, that your Installment util% went from 50% to 100%? Is that going to hurt much?

Re: Util and car loan

Anonymous — Mon, 02 Jun 2008 19:45:40 GMT

Yes, that's what it means. See my comments above about whether it will hurt much and whether it's even worth worrying about.