topic Re: Data points for losing points when closing accounts. in Understanding FICO® Scoring

Data points for losing points when closing accounts.

Anonymous — Tue, 11 Jun 2019 14:38:34 GMT

So I recently lost about 20 points accross the board (mortgage scores included) when my student loans reported paid in full from T&P disability discharge (10 loans in total and they were already reporting closed but with a balance and comment said deffered). I know simulators are crap almost always... but apparently the main issue is being down to 5 open accounts. It seems that a 6th open account gets you to the "credit stability" zone. My new credit builder loan from moneylion has yet to report so I am hoping to recoup points when that reports. I will update here when it does to let everyone know if I was right or if somehow the student loans being paid in full has found a glitch in the fico algorithm that caused this loss of points.

Re: Data points for losing points when closing accounts.

Anonymous — Tue, 11 Jun 2019 16:06:04 GMT

Sounds like you went from having an installment loan(s) to no loans reporting.

Re: Data points for losing points when closing accounts.

SouthJamaica — Tue, 11 Jun 2019 16:14:33 GMT

@Anonymous wrote:
So I recently lost about 20 points accross the board (mortgage scores included) when my student loans reported paid in full from T&P disability discharge (10 loans in total and they were already reporting closed but with a balance and comment said deffered). I know simulators are crap almost always... but apparently the main issue is being down to 5 open accounts. It seems that a 6th open account gets you to the "credit stability" zone. My new credit builder loan from moneylion has yet to report so I am hoping to recoup points when that reports. I will update here when it does to let everyone know if I was right or if somehow the student loans being paid in full has found a glitch in the fico algorithm that caused this loss of points.

No it doesn't work that way. That is pure fiction about the "credit stability zone" and there is no need to have 6 open accounts.

What is reality is that the FICO 8's and 9's penalize you for having no open installment loans. So if the student loans were your only installment loans, then paying them down to zero brought that penalty into play.

Meanwhile, you have provided us with zero information about your revolving and installment accounts, so we cannot really assess what caused the point loss. And I have no idea what a T&P Disability Discharge is, let alone how, if at all, it might affect your scores.

Re: Data points for losing points when closing accounts.

Revelate — Wed, 12 Jun 2019 00:55:43 GMT

Hmm, I am assuming you got scores from here referencing mortgage scores: if it isn’t too much trouble I would love to see before and after reason codes for certainly the mortgage scores (sadly the FICO 8 classic ones are not great) as like SJ I have no idea how that particular deferment codes or scoring impact from it.

I also don’t think there is a credit stability zone honestly as thin files appear to be less than 5 tradelines; utilization factors are basically the only thing which changes typically but when we are talking non-standard exclusions something else might be strange upon update.

Re: Data points for losing points when closing accounts.

Anonymous — Wed, 12 Jun 2019 01:43:08 GMT

Closed accounts also count equally toward file thickness, so even if a bunch of student loans reported closed, those loans are still on your CR and adding to your file thickness until the day they drop off.