topic Re: Geez! Lost 24 points in Understanding FICO® Scoring

Geez! Lost 24 points

babbles — Thu, 08 Nov 2018 18:39:54 GMT

I think someone may have answered this previously but I lost 23 and 24 points on my eq and tu files respectively because my home was sold and zeroed out, why is that again?

Re: Geez! Lost 24 points

Anonymous — Thu, 08 Nov 2018 19:07:38 GMT

We can walk you through exactly what happened (and why) if you list all your loans with the balance and original loan amount. Like this:

Loan 1. Balance = ____ Original Amount = ____

Loan 2. Balance = ____ Original Amount = ____

Loan 3. Balance = ____ Original Amount = ____

etc.

This would be before you paid off the home loan.

The quick answer is that before the payoff you probably had almost all of your open debt paid off. Now you either have no open loans or you do but you owe a greater proportion on them. EXAMPLE:

Mortgage. Balance = 3k. Original amount = 300k.

Auto loan. Balance = 19k. Original amount = 20k.

Before the payoff, your "installment utilization" was (3 + 19) / (300 + 20) = 6.9%. After the payoff it was 19/20 = 95%.

FICO 8 really likes it when your open debt is mostly but not entirely paid off. You were being given a lot of points for that. You no longer are getting those scoring points which manifests itself as a score drop.

Re: Geez! Lost 24 points

dragontears — Thu, 08 Nov 2018 19:09:10 GMT

EQ and TU..... where are you getting your score from?

Re: Geez! Lost 24 points

Anonymous — Thu, 08 Nov 2018 23:24:53 GMT

@dragontears wrote:
EQ and TU..... where are you getting your score from?

Nice catch! The person may be looking at Credit Karma's scores, which are Vantage. Almost no lenders or CC issuers use those scores for making decisions.

That said, a drop in FICO 8 scores might have happened as well, depending on the loans, balances, and amounts.

Re: Geez! Lost 24 points

Anonymous — Thu, 08 Nov 2018 19:31:23 GMT

Gotta always question when TU and EQ "scores" are referenced, but no EX...

Re: Geez! Lost 24 points

babbles — Thu, 08 Nov 2018 23:19:30 GMT

Thanks for the replies. I actually have FICO monitoring products is where I got the alerts from this afternoon. EX has not shown up yet.

Re: Geez! Lost 24 points

Anonymous — Thu, 08 Nov 2018 23:27:20 GMT

Good to know. Let me know if you followed what I explained about installment utilization. If you want a certain answer we'll need the loans, balances, and original amounts.

Re: Geez! Lost 24 points

babbles — Thu, 08 Nov 2018 23:28:27 GMT

No! That was an excellent explanation!!

Re: Geez! Lost 24 points

RonM21 — Fri, 09 Nov 2018 00:08:52 GMT

Sorry to hear about the point drop OP, but don't let it discourage you. It is still better to have less debt overall, even though depending on your profile, the Fico scoring may not reflect that.

Re: Geez! Lost 24 points

Anonymous — Sun, 11 Nov 2018 05:21:26 GMT

Less debt is King to greater FICO scores.

Re: Geez! Lost 24 points

Anonymous — Sun, 11 Nov 2018 05:27:54 GMT

The good news in this case is that it is possible to get all those scoring points back and still have almost zero debt.