topic Re: Student Loan Over 100% in Understanding FICO® Scoring

Student Loan Over 100%

Queen_Etherea — Mon, 22 Jul 2019 13:59:31 GMT

Ok so I have a really old student loan that I basically never paid. I was able to rehab the loan and have had on time payments for the past almost 3 years. The original amount was for $2,500, but because of interest and time, the total came to around $6,000. I've paid it down to about $3,800, but it's obviously still above 100% the amount.

So my question: Is having the loan at over 100% hurting my score? Do you think my score will go up once I pay it down below the 100% line? I know I should get a little bump once I've paid it down significantly more, but what about getting it at like 95%?

Thanks!

Re: Student Loan Over 100%

dynamicvb — Mon, 22 Jul 2019 14:32:57 GMT

I've always been curious about this too. Don't really know the answer, but do have a similar situation.

Re: Student Loan Over 100%

calyx — Mon, 22 Jul 2019 18:48:35 GMT

I believe the general consensus is that installment loan utilization does not have the impact that revolvers do (on your FICO scoring).
Having a student loan over 100% isn't going to matter much.

What matters is when your aggregate loan utilization is below 9% - you'll get a nice scoring bump.

While it's all profile dependent, I can say I didn't see any significant movement (that couldn't be easily attributed to something else) paying my student loan from >100% to 74%

Re: Student Loan Over 100%

Queen_Etherea — Mon, 22 Jul 2019 15:32:20 GMT

@calyx wrote:
I believe the general consensus is that installment loan utilization does not have the impact that revolvers do (on your FICO scoring).
Having a student loan over 100% isn't going to matter much.

What matters is when your aggregate loan utilization is below 9% - you'll get a nice scoring bump.

While it's all profile dependent, I can say I didn't see any significant movement paying my student loan from >100% to 74%

This is exactly what I was looking for! Thank you very much!

Re: Student Loan Over 100%

calyx — Mon, 22 Jul 2019 15:42:58 GMT

Happy to help!

And just to make it even more fun (and confusing) at any given time, I'll have bureaus list the installment loan amounts/paydown as both a "negative" and "positive" factor at the same time.

Re: Student Loan Over 100%

Anonymous — Mon, 22 Jul 2019 19:05:44 GMT

I asked a similar question. I was curious as to how my high utilization student loans were affecting my score.
The answer I got from the folks here was that it's not stopping an ideal profile from being over 800. I think they said it was probably only ~30 points.
This makes sense because my current score is with the multiple >100% util loans and a 90 day late. Our profiles look very similar too.

If you have any lates left from before the default, that's costing you more points. You could try disputing them to try to get them removed.

Re: Student Loan Over 100%

ibebarrett — Wed, 24 Jul 2019 00:46:17 GMT

@Queen_Etherea wrote:
Ok so I have a really old student loan that I basically never paid. I was able to rehab the loan and have had on time payments for the past almost 3 years. The original amount was for $2,500, but because of interest and time, the total came to around $6,000. I've paid it down to about $3,800, but it's obviously still above 100% the amount.

So my question: Is having the loan at over 100% hurting my score? Do you think my score will go up once I pay it down below the 100% line? I know I should get a little bump once I've paid it down significantly more, but what about getting it at like 95%?

Thanks!

So I was in a situation where my student loans were collectively at ~106% of the original principal, I made a lumpsum payment to bring it down to 95% and didn't see a single point difference. I think you'd have to bring the balance down by at least 2k to start seeing score gains.

Hope this helps!

Re: Student Loan Over 100%

Anonymous — Wed, 24 Jul 2019 00:53:38 GMT

@calyx wrote:

And just to make it even more fun (and confusing) at any given time, I'll have bureaus list the installment loan amounts/paydown as both a "negative" and "positive" factor at the same time.

Just a FYI positive reason codes have no bearing at all on Fico scores, just negative ones... so any "positive" factor that you're being shown is just fluff and doesn't be viewed as something that's increasing a Fico score.

Re: Student Loan Over 100%

Anonymous — Wed, 24 Jul 2019 00:57:20 GMT

@Queen_Etherea wrote:

So my question: Is having the loan at over 100% hurting my score?

Nope, it isn't. Anything over a certain threshold (say) 88.9% is going to be viewed as maxed out, so going above that isn't going to make a difference with respect to Fico scoring. The only way this could adversely impact you is if you had another installment loan that was of similar/greater value and it was significantly paid down already... meaning your aggregate loan utilization was a good bit (threshold crossing) lower than this individual loan. In a situation like that, the numerator (amount owed) on this student loan if it exceeded the denominator would also adversely impact aggregate installment loan utilization, which if it crossed a threshold could result in a (not too significant) loss.

Re: Student Loan Over 100%

calyx — Wed, 24 Jul 2019 12:39:01 GMT

@Anonymous wrote:
@calyx wrote:

And just to make it even more fun (and confusing) at any given time, I'll have bureaus list the installment loan amounts/paydown as both a "negative" and "positive" factor at the same time.
Just a FYI positive reason codes have no bearing at all on Fico scores, just negative ones... so any "positive" factor that you're being shown is just fluff and doesn't be viewed as something that's increasing a Fico score.

Oh, absolutely, but it can still give me a giggle

Re: Student Loan Over 100%

Remedios — Wed, 24 Jul 2019 12:55:06 GMT

@calyx wrote:
@Anonymous wrote:
@calyx wrote:

And just to make it even more fun (and confusing) at any given time, I'll have bureaus list the installment loan amounts/paydown as both a "negative" and "positive" factor at the same time.
Just a FYI positive reason codes have no bearing at all on Fico scores, just negative ones... so any "positive" factor that you're being shown is just fluff and doesn't be viewed as something that's increasing a Fico score.
Oh, absolutely, but it can still give me a giggle

That's good to know. So next time I see " No missed payments", "recent card usage" and "low revolving usage" I'll disregard that, . Absolutely no positive bearing on Fico scores. 😐

Re: Student Loan Over 100%

Anonymous — Wed, 24 Jul 2019 14:58:14 GMT

@Remedios wrote:
That's good to know. So next time I see " No missed payments", "recent card usage" and "low revolving usage" I'll disregard that, . Absolutely no positive bearing on Fico scores. 😐

Those positive statements are just fluff, where the presence of a negative reason statement means that it is adversely impacting you Fico points. Those positive statements listed aren't giving you bonus Fico points, it's just that their converse isn't adversely impacting your scores. For example it's not the "no missed payments" that's boosting your score, it's the lack of a late payment that isn't reducing your score. While it may seem like the same thing, it isn't.

Re: Student Loan Over 100%

Queen_Etherea — Tue, 30 Jul 2019 14:23:17 GMT

@Anonymous wrote:
I asked a similar question. I was curious as to how my high utilization student loans were affecting my score.
The answer I got from the folks here was that it's not stopping an ideal profile from being over 800. I think they said it was probably only ~30 points.
This makes sense because my current score is with the multiple >100% util loans and a 90 day late. Our profiles look very similar too.

If you have any lates left from before the default, that's costing you more points. You could try disputing them to try to get them removed.

All of my late payments were removed last year when they hit the 7 year mark. I got lucky enough to start my rebuild right when all of my bad stuff was going to fall off anyways. At the time I rehabbed the loan, I honestly didn't give a hoot about my credit, but it was only $5/month to bring it back to good standing, so I figured why not?

I have no lates (except EQ because they're idiots and won't remove the 30 day late, even by request of the OC), no collections, just a lot of new accounts. I went a little app crazy when all my baddies fell off LOL.

30 points is a lot! I'd be in the high 700's with 30 points! I only have the one loan that's over 100%. Everything else is below the original amount, but my car loan is new, so that one is still pretty high.

Re: Student Loan Over 100%

Anonymous — Tue, 30 Jul 2019 15:27:11 GMT

Yes, 30 points can be a lot below a certain score but you're also not getting it back until you pay off the loan. Although I think there is some small gain by paying it down to the next util threshold, I believe the biggest gain still isn't until below 8.9% (??).
If you have no lates, I know you're scored differently. But I seem to have just as many inquiries as you. I'm curious why there is such a big point difference between us.

Re: Student Loan Over 100%

Queen_Etherea — Tue, 30 Jul 2019 19:55:07 GMT

@Anonymous wrote:
Yes, 30 points can be a lot below a certain score but you're also not getting it back until you pay off the loan. Although I think there is some small gain by paying it down to the next util threshold, I believe the biggest gain still isn't until below 8.9% (??).
If you have no lates, I know you're scored differently. But I seem to have just as many inquiries as you. I'm curious why there is such a big point difference between us.

Probably because you have 5 accounts and I have about 13 new accounts in the past year LOL. My AAoA is around 2 years and 6 months? Yours is 10 years so that's a big difference and definitely matters! My AoOA is 12 years and 7 months old, which is the student loan. History is a big factor when it comes to your score, and I just have way too many new accounts. My newest account barely hit 3 months. I'm 100% determined to stop applying for anything any time soon.

Re: Student Loan Over 100%

Anonymous — Tue, 30 Jul 2019 21:16:00 GMT

Okay, I see. Thanks. I was looking at your inquiries. 5/6 of my cards are less than 2 yrs old and my car lease is pretty new but I guess my student loans counteract any new stuff for my age.

Did you only have the inquiry for the first AMEX or were there any for the other two?

Re: Student Loan Over 100%

Queen_Etherea — Wed, 31 Jul 2019 16:20:42 GMT

@Anonymous wrote:
Okay, I see. Thanks. I was looking at your inquiries. 5/6 of my cards are less than 2 yrs old and my car lease is pretty new but I guess my student loans counteract any new stuff for my age.

Did you only have the inquiry for the first AMEX or were there any for the other two?

Only 1 inquiry for all 3! The first one I got was the Blue Cash Everyday, then I apped for the Blue Cash Preferred (which is the one I actually wanted), and then the Everyday Preferred. I did make sure I was pre-approved for those before applying. If you're already an AMEX holder, you can just click on any one of their cards when you're logged in and hit apply. A page will come up saying either "Congratulations, "Insert name here"! You're Pre-Approved!" or something like "Expanding your membership with us is easy" which means you're not pre-approved.

Re: Student Loan Over 100%

Anonymous — Wed, 31 Jul 2019 17:54:20 GMT

Queen Ethereal: Cool! Thank you!

Re: Student Loan Over 100%

calyx — Wed, 31 Jul 2019 19:16:32 GMT

@Queen_Etherea wrote:
@Anonymous wrote:
Yes, 30 points can be a lot below a certain score but you're also not getting it back until you pay off the loan. Although I think there is some small gain by paying it down to the next util threshold, I believe the biggest gain still isn't until below 8.9% (??).
If you have no lates, I know you're scored differently. But I seem to have just as many inquiries as you. I'm curious why there is such a big point difference between us.

Probably because you have 5 accounts and I have about 13 new accounts in the past year LOL. My AAoA is around 2 years and 6 months? Yours is 10 years so that's a big difference and definitely matters! My AoOA is 12 years and 7 months old, which is the student loan. History is a big factor when it comes to your score, and I just have way too many new accounts. My newest account barely hit 3 months. I'm 100% determined to stop applying for anything any time soon.

Just to butt in - it's so weird, because you're not far from me in profile, and I feel like your scores should be higher than mine*.
My oldest account is 1 year. That leaves 9 at <1 year, my only account older than 1 year is an AU I'm on (15y, which brings my AAoA to 2y). I've always assumed I didn't trip the abuse trigger with my AU, and I feel like this confirms it.
My scorable inquiries are 5/5/3 (TU is the 3), and my loans are at 75% (SL) and 93% (Auto) for an aggregate 85%.
My youngest account is 1m.

Stupid FICO

*(well, except for EQ - I still have my student loan lates/default showing on that one, which is why it's low).