topic Re: Impact of Installment loan below 10% with dirty file in Understanding FICO® Scoring

Impact of Installment loan below 10% with dirty file

randomguy1 — Thu, 09 Jul 2020 22:45:19 GMT

Due to some aging my middle score might be borderline 700 vs my Experian mortgage score which is 730. I strongly considered paying down my car loan since I have 20% down and enough liquidity still to do so. It is going to cost me roughly $6500 to get it down to 8.9% which I decided to do. How much of a mortgage score increase do should I expect?

Credit profile:

1 90 day late on record (2+ years ago) and a couple 60 day lates, and a bunch of 30 day lates (20 or so lates in total)

4 Open revolvers: AZEO (no lates)

1 Open Installment auto loan (no lates)

4 Closed Installment auto loans (1 has 2 30 day lates, the rest of the lates are on another loan)

2 closed mortgage loans (no lates)

EX: 3 INQ

EQ: 4 INQ

TU: 6 INQ

I won't have my other two mortgage scores until the beginning of next month.

Re: Impact of Installment loan below 10% with dirty file

SouthJamaica — Sat, 11 Jul 2020 03:02:51 GMT

@randomguy1 wrote:

Due to some aging my middle score might be borderline 700 vs my Experian mortgage score which is 730. I strongly considered paying down my car loan since I have 20% down and enough liquidity still to do so. It is going to cost me roughly $6500 to get it down to 8.9% which I decided to do. How much of a mortgage score increase do should I expect?

Credit profile:

1 90 day late on record (2+ years ago) and a couple 60 day lates, and a bunch of 30 day lates (20 or so lates in total)
4 Open revolvers: AZEO (no lates)
1 Open Installment auto loan (no lates)
4 Closed Installment auto loans (1 has 2 30 day lates, the rest of the lates are on another loan)
2 closed mortgage loans (no lates)

EX: 3 INQ
EQ: 4 INQ
TU: 6 INQ

I won't have my other two mortgage scores until the beginning of next month.

Hate to disappoint, but installment utilization percentage has very little effect on mortgage scores. In my profile TU FICO 4 moved a little, the others didn't even notice. In @Revelate's profile it moved the needle a little in EX FICO 2, and not at all in the other 2. It helps FICO 8 and 9 scores, but not the mortgage scores.

You would get more action in your mortgage scores by concentrating on your revolving balances.

Re: Impact of Installment loan below 10% with dirty file

randomguy1 — Sat, 11 Jul 2020 03:07:52 GMT

No worries. Less debt, it's all good.

It's the only debt I have so I couldn't do anything I'm not already doing for my revolvers (AZEO).

I guess I'll be ready for a CC app spree with the loan funds? 😂

Re: Impact of Installment loan below 10% with dirty file

SouthJamaica — Sat, 11 Jul 2020 04:00:20 GMT

@randomguy1 wrote:
No worries. Less debt, it's all good.

True. Also I am told that mortgage loan officers are very interested in Debt-To-Income ratio, so although it might not have much impact on your score, it could have significant positive impact on your application in a different way.

It's the only debt I have so I couldn't do anything I'm not already doing for my revolvers (AZEO).

Great that you're in that position.

I guess I'll be ready for a CC app spree with the loan funds? 😂

Re: Impact of Installment loan below 10% with dirty file

randomguy1 — Sat, 11 Jul 2020 04:08:13 GMT

@SouthJamaica wrote:
@randomguy1 wrote:
No worries. Less debt, it's all good.

True. Also I am told that mortgage loan officers are very interested in Debt-To-Income ratio, so although it might not have much impact on your score, it could have significant positive impact on your application in a different way.

It's the only debt I have so I couldn't do anything I'm not already doing for my revolvers (AZEO).

Great that you're in that position.

I guess I'll be ready for a CC app spree with the loan funds? 😂

DTI - I'm in a good position, think it will be under 20%. Loan (thanks TX) isn't that high after down payment.