topic Re: Why did I lose 14 points from this? in Understanding FICO® Scoring

Why did I lose 14 points from this?

masscredit — Mon, 04 Jul 2016 16:51:05 GMT

I'm trying to figure out why my EQ08 score just lost 14 points. Below is a screen shot of the newly reported description that shows that the account is closed or paid. It has a zero balance. It's had a zero balance since it's last activity in January of '08.

Re: Why did I lose 14 points from this?

Thomas_Thumb — Mon, 04 Jul 2016 17:25:15 GMT

Was this an installment loan? If so, was it your only "open" loan?

An open loan with zero balance may be a score booster for a few reasons:

1) Fico 08 wants to see an open loan and it may not look at loan activity - just that is is not closed. If you now have no open/active loans => score drop.

2) if you have another open/active loan, this other loan would have lowered your aggregate balance to loan ratio due to the zero balance. Now that it is closed, you lose the benefit of the loan amount which causes aggregate B/L to increase. Depending on before/after aggregate B/L a threshold may have been crossed.

3) Really not sure if an inactive account that is subsequently closed will impact score directly. However, it would e a trigger event for a data pull - score update.

If this account was a credit card then the account ststus change may have some temporary affect and the loss in associated credit limit may have increased aggregate CC utilization.

Re: Why did I lose 14 points from this?

masscredit — Mon, 04 Jul 2016 18:20:28 GMT

It was an installment loan for a jet ski. It took it out in 2006 and paid it off at the beginning of 2008. It shouldn't age off until the beginning of 2018.

I currently have an auto loan (I'll probably always have one ).

Re: Why did I lose 14 points from this?

Revelate — Mon, 04 Jul 2016 18:26:57 GMT

@masscredit wrote:
It was an installment loan for a jet ski. It took it out in 2006 and paid it off at the beginning of 2008. It shouldn't age off until the beginning of 2018.

I currently have an auto loan (I'll probably always have one ).

To expand on what TT suggested explicitly, what was your aggregate installment loan utilization before and after counting only open tradelines?

Credit mix is either seperate or no longer exists as we know it in FICO 8 and later, it's all about open accounts, at pretty utilization metrics for certainly installment and revolving has always worked rather similarly.

Re: Why did I lose 14 points from this?

masscredit — Mon, 04 Jul 2016 18:48:25 GMT

My auto loan is currently reporting at 73% (Started at $24995, reporting $18233). It will be at 69% when it updates and shows my last payment. That will bring it down to about $17200.

I'm looking at Credit Karma now. There were two accounts that updated -

Last Reported Jun 30, 2016
Creditor Name SYNCB/YAMAHA
Account Type Secured Loan
Account Status Closed - Paid and Closed
Opened Date May 15, 2007
Closed Date Apr 01, 2016
Limit --
Term 60 Months
Monthly Payment --
Responsibility Individual Account.
Balance $0
Highest Balance $10,900
Payment Status Current
Worst Payment Status --
Date of Last Payment Nov 01, 2007
Amount Past Due --
Times 30/60/90 Days Late 0/0/0
Remarks --

===================

Last Reported Jun 30, 2016
Creditor Name SYNCB/YAMAHA
Account Type Secured Loan
Account Status Closed - Paid and Closed
Opened Date Apr 14, 2006
Closed Date May 01, 2016
Limit --
Term 60 Months
Monthly Payment --
Responsibility Individual Account.
Balance $0
Highest Balance $11,219
Payment Status Current
Worst Payment Status --
Date of Last Payment Jan 01, 2008
Amount Past Due --
Times 30/60/90 Days Late 0/0/0
Remarks

Re: Why did I lose 14 points from this?

Revelate — Mon, 04 Jul 2016 18:47:15 GMT

39% -> 73% by napkin math.

May have crossed a threshold actually as the line is somewhere either at 70 or 80% for installment utilization. 14 points seems high on your file for that but maybe.

I'll be very interested to see what your score does when the remaining loan updates to <70% if it doesn't get lost in the balance twiddling you're doing. Might be something else going on too, your report is kinda busy senor .

Re: Why did I lose 14 points from this?

Thomas_Thumb — Mon, 04 Jul 2016 18:53:37 GMT

It appears the initial jet ski loan amount was $11,219. It appears that your jet ski loan was paid off but somehow remained open until recently

1) Current aggregate installment loan [balance to loan ratio] = ($18,247)/($24,995) = 73%

2) Previous aggregate installment loan [balance to loan ratiop] = ($18,247)/($24,995 + $11,219) = 50.4%

If the above is true, you may have crossed an aggregate balance to loan threshold likely in the 65% to 70% range.

Re: Why did I lose 14 points from this?

masscredit — Mon, 04 Jul 2016 18:54:38 GMT

CK lists those accounts under recently closed. I'm very surprised that they took this long. I guess this is one of those things that left me thinking "Whoa... what just happened?".

Re: Why did I lose 14 points from this?

Revelate — Mon, 04 Jul 2016 18:55:36 GMT

@Thomas_Thumb wrote:
It appears the initial jet ski loan amount was $11,219. It appears that your jet ski loan was paid off but somehow remained open until recently

1) Current aggregate installment loan [balance to loan ratio] = ($18,247)/($24,995) = 73%
2) Previous aggregate installment loan [balance to loan ratiop] = ($18,247)/($24,995 + $11,219) = 50.4%

If the above is true, you may have crossed an aggregate balance to loan threshold likely in the 65% to 70% range.

Apparently two tradelines, double the pleasure double the fun; hence the difference in our calculations but still same threshold analysis.

Re: Why did I lose 14 points from this?

Revelate — Mon, 04 Jul 2016 18:56:45 GMT

@masscredit wrote:
CK lists those accounts under recently closed. I'm very surprised that they took this long. I guess this is one of those things that left me thinking "Whoa... what just happened?".

I'm certain you have non-CK reports somewhere, go look at a couple older ones and see what they were reporting for the loans, or even historical CK ones for that matter.

Re: Why did I lose 14 points from this?

masscredit — Mon, 04 Jul 2016 19:02:12 GMT

@Thomas_Thumb wrote:
It appears the initial jet ski loan amount was $11,219. It appears that your jet ski loan was paid off but somehow remained open until recently

1) Current aggregate installment loan [balance to loan ratio] = ($18,247)/($24,995) = 73%
2) Previous aggregate installment loan [balance to loan ratiop] = ($18,247)/($24,995 + $11,219) = 50.4%

If the above is true, you may have crossed an aggregate balance to loan threshold likely in the 65% to 70% range.

My alert showed one account that triggered the score change. Digging deeper (CK) showed the two jet ski loans that I had ($11,219 + $10,900) plus the auto loan ($24,995). $47,114 total. With that being the case, I was at 38% and now I'm showing 73%. I guess this will be a test to see what happens when my recent loan payment reports to get me to 69%. I doubled it up last week for that reason. I didn't expect this curve ball to be thrown my way.

Re: Why did I lose 14 points from this?

Thomas_Thumb — Mon, 04 Jul 2016 19:04:35 GMT

@Revelate wrote:
@Thomas_Thumb wrote:
It appears the initial jet ski loan amount was $11,219. It appears that your jet ski loan was paid off but somehow remained open until recently

1) Current aggregate installment loan [balance to loan ratio] = ($18,247)/($24,995) = 73%
2) Previous aggregate installment loan [balance to loan ratiop] = ($18,247)/($24,995 + $11,219) = 50.4%

If the above is true, you may have crossed an aggregate balance to loan threshold likely in the 65% to 70% range.

Apparently two tradelines, double the pleasure double the fun; hence the difference in our calculations but still same threshold analysis.

Oops - missed that other loan. I'm making a lot of errors these days. Unfortunately, the 2 loan removal leaves open 50% as a possibility.

However...I keep going back to CAPTOOL's data that zeroed in on the 67% to 71% range - so it appears this data cetainly does not conflict with the 70% hypothesis.

Re: Why did I lose 14 points from this?

masscredit — Mon, 04 Jul 2016 19:08:56 GMT

I'm looking at an EQ report from last August. It shows one open installment loan (my auto loan). The two jet ski loans are there with zero balances and last activity in 2007/'08.

Re: Why did I lose 14 points from this?

Revelate — Mon, 04 Jul 2016 19:56:06 GMT

@Thomas_Thumb wrote:
@Revelate wrote:
@Thomas_Thumb wrote:
It appears the initial jet ski loan amount was $11,219. It appears that your jet ski loan was paid off but somehow remained open until recently

1) Current aggregate installment loan [balance to loan ratio] = ($18,247)/($24,995) = 73%
2) Previous aggregate installment loan [balance to loan ratiop] = ($18,247)/($24,995 + $11,219) = 50.4%

If the above is true, you may have crossed an aggregate balance to loan threshold likely in the 65% to 70% range.

Apparently two tradelines, double the pleasure double the fun; hence the difference in our calculations but still same threshold analysis.
Oops - missed that other loan. I'm making a lot of errors these days. Unfortunately, the 2 loan removal leaves open 50% as a possibility.

However...I keep going back to CAPTOOL's data that zeroed in on the 67% to 71% range - so it appears this data cetainly does not conflict with the 70% hypothesis.

My original data rules 50% out too FWIW.

Re: Why did I lose 14 points from this?

Anonymous — Mon, 04 Jul 2016 22:23:42 GMT

What I'm seeing is that last updated date, was your trigger, the original creditor submitted an update that finally pulled it to completely closed and paid, prior to that date, it was just showing with no activity, open with a zero balance....so this may have triggered your short drop because you have that 1 installment that you're still paying on. You should rebound rather quickly also suspect that it will fall off before 2018 on that yamaha loan. This happened to me about two weeks ago, I only had 1 old installment loan still reporting open with a 0 balance outside of my student loans. My scores went down about 7 points on the two CRAs that had it still reporting, but rebounded less than a week later by lowering my utilization 2% points from 9% to 7%.

Re: Why did I lose 14 points from this?

masscredit — Sun, 10 Jul 2016 20:32:55 GMT

My EQ08 score gained 13 points today. No reason was given. Looking at my current report, I see that my auto loan is now reporting a balance of $17,177 (69%). Last month I let all 10 of my cards report balances to see what that would do to my scores (http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Going-to-let-10-10-cards-report-a-balance/td-p/4618666). Three Cap 1 cards are now reporting $0.00 and the balance on the forth one dropped by about $700.00. This score only lost a total of 3 points during the test so I don't think the Cap 1 cards are the reason that it changed. The only reason that I can see is the current loan balance dropped below 70% of the origional amount. There might be a few more points gained when it reaches the next level.

Overall, I feel better to get my points back.

Re: Why did I lose 14 points from this?

Thomas_Thumb — Wed, 13 Jul 2016 00:20:26 GMT

@masscredit wrote:
My EQ08 score gained 13 points today. No reason was given. Looking at my current report, I see that my auto loan is now reporting a balance of $17,177 (69%). Last month I let all 10 of my cards report balances to see what that would do to my scores (http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Going-to-let-10-10-cards-report-a-balance/td-p/4618666). Three Cap 1 cards are now reporting $0.00 and the balance on the forth one dropped by about $700.00. This score only lost a total of 3 points during the test so I don't think the Cap 1 cards are the reason that it changed. The only reason that I can see is the current loan balance dropped below 70% of the origional amount. There might be a few more points gained when it reaches the next level.

Overall, I feel better to get my points back.

Interesting data point.

Re: Why did I lose 14 points from this?

JLK93 — Wed, 13 Jul 2016 19:05:59 GMT

@Thomas_Thumb wrote:
@masscredit wrote:
My EQ08 score gained 13 points today. No reason was given. Looking at my current report, I see that my auto loan is now reporting a balance of $17,177 (69%). Last month I let all 10 of my cards report balances to see what that would do to my scores (http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Going-to-let-10-10-cards-report-a-balance/td-p/4618666). Three Cap 1 cards are now reporting $0.00 and the balance on the forth one dropped by about $700.00. This score only lost a total of 3 points during the test so I don't think the Cap 1 cards are the reason that it changed. The only reason that I can see is the current loan balance dropped below 70% of the origional amount. There might be a few more points gained when it reaches the next level.

Overall, I feel better to get my points back.
Interesting data point.

It is a very interesting data point for auto loans. Let's hope it doesn't automatically become a data point for other types of installment loans.

Re: Why did I lose 14 points from this?

Thomas_Thumb — Wed, 13 Jul 2016 23:57:13 GMT

The 70% appears to apply to a lot more than auto loans - I would venture to say it may relate to installment loans in general - except mortgages which are coded differently.

Pasted below again is CAPTOOL data which I often reference fort the 70% B/L hypothesis. Also included are a couple links to posts in various threads relating to this subject.

http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Installment-tradeline-utilization-thread/m-p/4256785#M99832

@Thomas_Thumb wrote:

@Revelate wrote:
@Anonymous wrote:
@Anonymous wrote:
I have a little bit of data to report. I have a $2050 interest only secured installment loan I took out in February 2014. I have a $5000 Lending Club loan I took out in March 2015. I have a $5000 Promise Financial loan I took out last month. That's the basics.

I used the Promise Financial loan, (WAY lower APR), to pay off the Lending Club loan and pay the smaller loan down. As of today, Promise Financial is not yet reporting, Lending Club is still reporting a balance of $4558, and the secured loan just reported the new balance of $125, last report was $525.

Experian Fico 8 score:

8.31: 707
9.1: 712, (an inq passed 1 year)
Today with the new balance on the smaller loan showing: 723

I'm hoping that the Lending Club loan reports the 0 balance before the Promise Financial loan hits. I'm really curious what kind of impact that will have on the score.
Followup. The Lending Club loan just reported paid, and the Promise Financial Loan hasn't reported yet. Small loan still reporting $125. EX score jumped from 722 to 741. EQ score jumped from 719 to 746. Hasn't reported paid on TU yet, (it's currently at 784).
So from 72% to 6%. Our scores are similar though our files are different, means very little but that's about the magnitude of my entire jumps across 2 breakpoints which suggests maybe 70%. Sloppy napkin math by yours truly, hopefully someone can step through 80 and 70 to nail it down. Thanks for the datapoint!

My read on CAPTOOL's event sequence is as follows (viewed individually):

1) Reduced secured installment loan from 525/2050 (25.6%) to 125/2050 (6.1%) while reporting lending Club loan at 4558/5000 (91.2%) both times.

- Score increased from 712 to 723, Breakpoint at 20% or 10%?

2) Paid off Lending club loan (going from 91.2% to 0%) while maintaing secured loan at 125/2050 (6.1%).

- Score increase from 721 to 741 (crossed two breakpoints)?

Or CAPTOOL's event sequence viewed in aggregate:

(525+4558)/7050 = 72.1% => (125+4558)/7050 = 66.4% => 125/2050 = 6.1%

@ * ........score 712 @ 72% => score 723 @ 66%, score 722 @ 66% => score 741 @ 6%

The aggregate view suggests a breakpoint between 72% to 66% (at 70%?) and perhaps 2 breakpoints (or one with a larger impact) going from 66% to 6%.

Am I re-stating the event summary with corresponding scores correctly?

http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Don-t-EVER-get-a-tax-lien/m-p/4296645#M100813

Re: Don't EVER get a tax lien!!!!

‎10-26-2015 07:14 AM

Inverse wrote:

My tax liens are gone and I am gold plated.

One day I will provide a write up with details of my odyssey, but for the time being; here is some hope for those of you with tax liens.

FICO 8 paid/sastified tax liens impacted me 88-100 points on a fully optimized file. (More when unpaid)

The mortgage scores not quite as much increase.

We shall see if EQ 04 can weather the storm of a mortgage refi.

I have 2 inquiries on EQ and TU, 0 on EX

EQ 718 -> 784

TU 733 -> 792

EX 733 -> 822

Installment utilization is:

just under 80% on the auto loan

2 mortgages, 2 properties

1 at 40%

1 just under 90%

mortage installment "utilization" under 64%

overall installment "utilization" just over 65%

8+ years AAoA with 18++ years oldest account but not enough history.

Re: Why did I lose 14 points from this?

JLK93 — Thu, 14 Jul 2016 00:36:49 GMT

@Thomas_Thumb wrote:
The 70% appears to apply to a lot more than auto loans - I would venture to say it may relate to installment loans in general - except mortgages which are coded differently.

Pasted below again is CAPTOOL data which I often reference fort the 70% B/L hypothesis. Also included are a couple links to posts in various threads relating to this subject.

Thankyou, Thomas_Thumb, for the long copy and paste.

The primary problem with this 70% hypothesis is that all evidence suggests that I have only 1 break point, at 10%, for a secured installment loan. I gained 39 points on Experian and 38 points on Equifax for going from approximately 12% to 8.5% on a secured installment loan.

It is certainly possible that this 70% break point is Scorecard dependent. It may, in fact, be related to dirty reports. However, no one is suggesting that the 70% break point is bucket dependent. Instead the knowledgeable posters on this forum seem to be suggesting that this is a universal break point. I simply do believe it. I have to mention one other important data point. In the last year, there has not been one poster, with only 1 secured installment loan, who as reported a 70% break point.

Based on my experience, I do not believe that the 70% break point exists, for secured installment loans, for clean credit reports.

Also, I have to point out that CAPTOOL had a loan through Lending Club. I have no reason to believe that these loans are scored the same way as secured installment loans.

I also do not believe sthat Auto loans are scored the same way as secured installment loans.

You have acknowledged, on more that one occasion, that Mortgage loans are scored differently that installment loans. However, there are other posters on this forum who insist that all loans, including Mortgage loans, are scored the same. I know, for a fact that this is not the case.

Having said all of that, I will be happy to be proved wrong. No one has proved it yet.