topic Re: $0 reported debt in Understanding FICO® Scoring

$0 reported debt

vanillabean — Sat, 13 May 2017 15:09:31 GMT

With a credit card, a mortgage and a HELOC each reporting a balance, my EX 8 was 846. It was 850 with the HELOC reporting no balance. When the mortgage disappeared due to soon to be transferred, the EX dropped to 830. When the credit card reported no balance on top of that, the score was all the way down to 808. That’s how my EX is at $0 reported debt.

My EQ 8 looks brighter. 850 usually, 849 with just one credit card and no installment balances, TBU at no debt.

TU usually at 850, 841 with no credit card reporting a balance and installments do, TBU at no debt.

So I am reminded of two things known to us: 1. FICO universally dislikes no balances on credit cards, 2. FICO 8 dislikes no installment accounts.

Re: $0 reported debt

Anonymous — Sat, 13 May 2017 15:13:22 GMT

Nice data points! Probably one of the reason that so many people who got the secured Alliant SSL hack already had very high FICOs! Seeing folks with 810 FICO scores getting a secured loan still makes me chuckle.

I have one of my tiny auto-charges fall 4 days before the statement date on the one card I show a small balance on. I pay it off the day after the statement cuts, pretty smooth sailing except for this past month when I pushed a PIF before statement cut and my FICO dropped 18 points from having no balances.

Re: $0 reported debt

Gunnar419 — Sat, 13 May 2017 15:40:15 GMT

vanillabean, thank you for the good data points! It's most interesting that you were able to reach 849 with nothing but a cc balance. I didn't think it was possible to go that high without a mortgage, car loan or something other than ccs.

My FICOs are in the 810-820 range with only ccs. I usually keep very small balances on one or two cards with total utilization under 1%, but I've been wondering how much better or worse those scores would be with either an installment loan or zero balances. Though I realize every profile is different, you've given very helpful data.

I dislike keeping balances on my cards just to get score points and have been thinking about paying the cards to zero. I'm also thinking about getting a small car loan this summer, so I've been wondering what either of these changes or a combination the two would do to my scores.

Re: $0 reported debt

Anonymous — Sat, 13 May 2017 15:42:45 GMT

I bet a car loan would get you close to 850 especially if you paid down a good portion of that loan quickly.

Re: $0 reported debt

Gunnar419 — Sat, 13 May 2017 15:53:37 GMT

@Anonymous wrote:
I bet a car loan would get you close to 850 especially if you paid down a good portion of that loan quickly.

I was afraid a car loan might initially push me back down into the 700s. FICO is so weird about installment loans. They're good! They're bad! Pay them down quickly but never, ever pay them off or you'll be completely screwed!

Since I don't plan any other credit apps, it's not that important what happens to my score and I realize being in the high 700s does no practical harm at all. It's only that I've gotten into the MyFICO habit of liking to keep a high score. My credit has gone from good to to excellent thanks to the advice I found here.

Even getting somewhere near 850 would be a dream come true.

Re: $0 reported debt

Anonymous — Sat, 13 May 2017 15:57:28 GMT

Why not just do the Alliant SSL then? Takes a week or so. No hard inquiry. Costs you $44 in tied up money and a few bucks in interest over 5 years.

If your FICO jumps closer to 850, you know what you need to do in terms of having a real installment loan!

Re: $0 reported debt

Revelate — Sat, 13 May 2017 16:56:16 GMT

@Gunnar419 wrote:
vanillabean, thank you for the good data points! It's most interesting that you were able to reach 849 with nothing but a cc balance. I didn't think it was possible to go that high without a mortgage, car loan or something other than ccs.

My FICOs are in the 810-820 range with only ccs. I usually keep very small balances on one or two cards with total utilization under 1%, but I've been wondering how much better or worse those scores would be with either an installment loan or zero balances. Though I realize every profile is different, you've given very helpful data.

I dislike keeping balances on my cards just to get score points and have been thinking about paying the cards to zero. I'm also thinking about getting a small car loan this summer, so I've been wondering what either of these changes or a combination the two would do to my scores.

Hey you, any reason you haven't done the SSL? Curious as you've been around here for a while and once we found that 2 years ago it caught on right quick.

Re: $0 reported debt

vanillabean — Sat, 13 May 2017 17:33:17 GMT

The credit card has now been reported by EQ as zeroed. The score dropped a whopping 29 points to 820.

Re: $0 reported debt

Anonymous — Sat, 13 May 2017 17:35:52 GMT

@vanillabean wrote:
The credit card has now been reported by EQ as zeroed. The score dropped a whopping 29 points to 820.

Careful there, Credit One might AA you, lol.

Re: $0 reported debt

Gunnar419 — Sat, 13 May 2017 19:14:48 GMT

ABCD and Revelate -- Until now I haven't thought about the Alliant loan, partly because although I cherish a high score I don't like the idea of playing FICO games for the sake of FICO games. Also, I haven't been planning to app for anything. Now that I may have an auto loan in my future, you remind me that the Alliant program might be both a good trial run and a good thing to have on my records to boost my auto FICOs. (I don't know what my auto FICOs are, but I'm sure they must be lower than my FICO8s.)

Thank you. Thank you, also, to whoever discovered the Alliant trick.

Re: $0 reported debt

Gunnar419 — Sat, 13 May 2017 19:16:02 GMT

@vanillabean wrote:
The credit card has now been reported by EQ as zeroed. The score dropped a whopping 29 points to 820.

Man, let one account report zero and all of a sudden you're a deadbeat. LOL!

Thanks for this datapoint, too, vanillabean.

Re: $0 reported debt

Revelate — Sun, 14 May 2017 02:14:59 GMT

@Gunnar419 wrote:
ABCD and Revelate -- Until now I haven't thought about the Alliant loan, partly because although I cherish a high score I don't like the idea of playing FICO games for the sake of FICO games. Also, I haven't been planning to app for anything. Now that I may have an auto loan in my future, you remind me that the Alliant program might be both a good trial run and a good thing to have on my records to boost my auto FICOs. (I don't know what my auto FICOs are, but I'm sure they must be lower than my FICO8s.)

Thank you. Thank you, also, to whoever discovered the Alliant trick.

Had to look at my old original data, but I did get a boost everywhere except for FICO 04 models for it including AU and Bankcard in addition to baseline FICO 8 and FICO 98, and I didn't have an open auto loan at the time as those were paid... though I do now have some verbiage on my reason codes for no recently reported auto loan for FICO 8 AU, but what can you do.

If you have some time before the auto loan I'd do it personally as it's absurdly cheap and easy to do, but your scores are high enough it probably won't make a huge difference to getting the auto loan financed with their best offer; I'm one who always chases score maximization though that might change once I am above 800 anyway.

The initial breakpoint demonstrating it does factor on the AU industry option scores and if a dealer pulls auto enhanced, it's probably FICO 8 (even if I never did figure out where that was explicitly) is shown in the first post in this awkwardly long thread if you are looking for confirmation datapoints:

http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Installment-tradeline-utilization-thread/td-p/4055989

If you are going with a CU for financing, may not matter at all vis a vis DCU uses EQ Beacon 5.0 which the SSL doesn't help at all except mix of credit, but since I build files to be pretty regardless of what algorithm is chosen, for those without installment loans, SSL trick FTW.

Re: $0 reported debt

newhis — Sun, 14 May 2017 04:11:22 GMT

@Anonymous wrote:
Nice data points! Probably one of the reason that so many people who got the secured Alliant SSL hack already had very high FICOs! Seeing folks with 810 FICO scores getting a secured loan still makes me chuckle.

I have one of my tiny auto-charges fall 4 days before the statement date on the one card I show a small balance on. I pay it off the day after the statement cuts, pretty smooth sailing except for this past month when I pushed a PIF before statement cut and my FICO dropped 18 points from having no balances.

Well if you are at 810 with no loan and get a secured loan to boost your score to 840, why not?

My TU FICO was around 807 before Alliant, 6 months later is at 838. Will stay in the garden until I see 850.

Re: $0 reported debt

vanillabean — Sun, 14 May 2017 17:41:50 GMT

Ouch. At $0 debt, TU is at 806. The gone mortgage dropped the score 35 points.

I may want to let a credit card report a balance soon.

Re: $0 reported debt

Anonymous — Tue, 16 May 2017 00:46:09 GMT

If you are at 806 without a revolving balance reported on any account and without a current open installment loan, I have little doubt at all that you'd hit the ceiling of 850 if you added the a SSL and let a $5 balance report on one card. Typically the addition of the loan and going from no cards reporting a balance to 1 card reporting a balance would yield someone around 45-55 points, which would put you at 850 with a slight buffer to boot.

Re: $0 reported debt

Anonymous — Tue, 16 May 2017 00:48:18 GMT

@Anonymous wrote:
If you are at 806 without a revolving balance reported on any account and without a current open installment loan, I have little doubt at all that you'd hit the ceiling of 850 if you added the a SSL and let a $5 balance report on one card. Typically the addition of the loan and going from no cards reporting a balance to 1 card reporting a balance would yield someone around 45-55 points, which would put you at 850 with a slight buffer to boot.

Agreed. Good friend of mine has been at 800 forever and I told him to do both and within a month of both reporting, he was at 848 or something like that. He's never been over 810 and he's got an AAoA of like 15+ years of perfect payments. Just no installments, no balances reported ever.

He was stunned by the revelation.

Re: $0 reported debt

Thomas_Thumb — Tue, 16 May 2017 02:06:21 GMT

@vanillabean wrote:
Ouch. At $0 debt, TU is at 806. The gone mortgage dropped the score 35 points.

I may want to let a credit card report a balance soon.

You better - you better - you bet.