topic Do I HAVE to have an AUTO if I have a MORTGAGE reporting?! in Understanding FICO® Scoring

Do I HAVE to have an AUTO if I have a MORTGAGE reporting?!

Girlzilla88 — Mon, 30 Nov 2020 16:46:30 GMT

Title pretty much states it all....I would like to pay my Auto loan off early but would that be a penatly for not have ANY auto or as long as I have my Mortgage then I have an Installment type loan and I will be ok and not have to worry about being penalized/drop?! Thank you

Re: Do I HAVE to have an AUTO if I have a MORTGAGE reporting?!

AllZero — Mon, 30 Nov 2020 17:00:39 GMT

You should be okay with the mortgage. 👍

You may want to calculate what your aggregate utilization % will be before and after.

Re: Do I HAVE to have an AUTO if I have a MORTGAGE reporting?!

Girlzilla88 — Mon, 30 Nov 2020 17:06:27 GMT

@AllZero My DTI the Mortgage will be taking the most 'chunk' of it but I do want to at some point get one card reporting and the Car paid off so I can see about doing a specific loan which will need to see as low of a DTI as I can report. I just don't want it to damage my Score negatively if I paid it off because of course Score will be a factor as well (but this is after I put it back to 750 plus XD

Re: Do I HAVE to have an AUTO if I have a MORTGAGE reporting?!

1GaDawg85 — Mon, 30 Nov 2020 17:58:48 GMT

@Girlzilla88 wrote:
Title pretty much states it all....I would like to pay my Auto loan off early but would that be a penatly for not have ANY auto or as long as I have my Mortgage then I have an Installment type loan and I will be ok and not have to worry about being penalized/drop?! Thank you

As long as you have a mortgage reporting, that is what matters.

Re: Do I HAVE to have an AUTO if I have a MORTGAGE reporting?!

SouthJamaica — Mon, 30 Nov 2020 22:58:52 GMT

@Girlzilla88 wrote:
Title pretty much states it all....I would like to pay my Auto loan off early but would that be a penatly for not have ANY auto or as long as I have my Mortgage then I have an Installment type loan and I will be ok and not have to worry about being penalized/drop?! Thank you

No you don't need it. Yes you can go get yourself a clean title.

The one case where it might be important would be if your combined installment utilization between the 2 loans was under 10%, and dropping the car loan and leaving the mortgage would put you over 10%. Otherwise, you're good to go.

Re: Do I HAVE to have an AUTO if I have a MORTGAGE reporting?!

Girlzilla88 — Mon, 30 Nov 2020 23:03:10 GMT

@SouthJamaica Lmao I wish my Mortgage was already at or near 10% XD

Re: Do I HAVE to have an AUTO if I have a MORTGAGE reporting?!

SouthJamaica — Mon, 30 Nov 2020 23:05:55 GMT

@Girlzilla88 wrote:
@SouthJamaica Lmao I wish my Mortgage was already at or near 10% XD

Well I didn't think so, but I just wanted to cover my bases

Re: Do I HAVE to have an AUTO if I have a MORTGAGE reporting?!

Anonymous — Tue, 01 Dec 2020 14:27:33 GMT

One minor point to make is that when you close your auto loan it's possible you'll see slight drops on your auto enhanced version scores. On some of the models it may be only a couple of points, where my EX Auto 8 dropped 14 points, for example.

Re: Do I HAVE to have an AUTO if I have a MORTGAGE reporting?!

Girlzilla88 — Tue, 01 Dec 2020 16:58:56 GMT

@Anonymous Interesting so that is with a paid off loan?! Did it bounce back a month or so after!? Or it didn't until you added a new one?!

Re: Do I HAVE to have an AUTO if I have a MORTGAGE reporting?!

Anonymous — Tue, 01 Dec 2020 18:57:05 GMT

That was with closing my only open auto loan. Like the OP, I had an open mortgage present that wasn't anywhere near close to being paid off. I now have 4 or 5 closed auto loans on my CR, but none open. I'm not sure if the closed ones help my auto scores (or any scores) but I am positive that on my profile not having an open auto loan definitely takes points away from Fico auto scores.

Re: Do I HAVE to have an AUTO if I have a MORTGAGE reporting?!

Girlzilla88 — Tue, 01 Dec 2020 19:00:13 GMT

@Anonymous Interesting...so do you think it would be helpful to ask for the New Auto Loan with a small remaining of the Current Loan showing/posting?! I would like to make sure my Auto is Ideal for what I am looking to do and if it is the difference between 5/10/15 points being Yes or No then I would rather keep it on.

Re: Do I HAVE to have an AUTO if I have a MORTGAGE reporting?!

Anonymous — Tue, 01 Dec 2020 19:06:56 GMT

If your auto scores dropping (say) 15 points would potentially result in a new auto loan at a higher interest rate then yes, I'd keep the old loan open with 1 payment left or whatever. That's assuming that the DTI increase with that payment present wouldn't impact the lending decision on the new loan. If it did, you could probably play your cards right and pay that loan off literally a day or two before going for the new loan and have the lender with which you just closed the loan send you a document stating that it has been paid in full. The old loan won't yet have reported as closed, so your auto scores wouldn't take the hit and you'd have a document allowing the new lender to no longer consider that [old] monthly payment into your DTI.

Re: Do I HAVE to have an AUTO if I have a MORTGAGE reporting?!

Girlzilla88 — Tue, 01 Dec 2020 19:16:42 GMT

@Anonymous That is a really neat idea I haven't thought of. I didn't know you could ask for a Paid Off Letter

Re: Do I HAVE to have an AUTO if I have a MORTGAGE reporting?!

Anonymous — Tue, 01 Dec 2020 22:54:11 GMT

Yup, letters are used quite often when a lender/customer needs information quicker than the information can update on a credit report or information that can "override" a credit report for lack of a better term.

I can think of 2 personal examples: Back in 2015 when my report was dirty and I went for a car loan the dealership was having trouble securing financing for me with the 619 score they pulled. I had a late payment showing on my CR from a month or two prior on my mortgage that was there in error. This was before I found this forum and ever looked at my credit reports, so I didn't know it was there. I called up the mortgage company and they faxed a letter to the dealership stating that the account wasn't late and the dealership financing department used that to get me approved. Second, I've had a high previously reported balance on my Citi card and have missed paying it off to $0 by the time the statement cut. I've contacted Citi asking for an off-cycle reporting to get the $0 reported (which they won't do) and they've said they would send a letter to my LO stating that the account was paid off which would allow them to make a DTI revision on their end when looking into a potential mortgage.

Re: Do I HAVE to have an AUTO if I have a MORTGAGE reporting?!

Girlzilla88 — Tue, 01 Dec 2020 22:58:37 GMT

@Anonymous Great DPs thanks for that