topic Re: Score Decreases/Increases when Personal Loan Paid in Full in Understanding FICO® Scoring

Score Decreases/Increases when Personal Loan Paid in Full

Anonymous — Thu, 17 Dec 2020 20:24:06 GMT

Giving this as a data point to show the various increases/decreases in Experian Fico Scores when paid off one of my personal loans.

Had 2 Personal Loans: 1 @ $18,500. 1 @ $35,000

Last reported amounts on Experian file, still owed $978 on the $18,500 loan (5.29% UTIL) and $30,100 on the $35,000 loan (86% UTIL). Combined UTIL was 58.09%

Paid off $18,500 loan in full and it reported today. Still owe $30,100 on the $35,000 loan (86% UTIL). No other changes.

Experian Fico 8: Decreased from 778 to 769

Experian Fico Mortgage 2: Increased from 741 to 746

Experian Fico Auto 2: Decreased from 733 to 724

Experian Fico Auto 8: Decreased from 765 to 745

Experian Fico Bankcard 2: Increased from 745 to 750

Experian Fico 3: No change

Experian Fico Bankcard 8: Decreased from 794 to 783

Bit of a mixed bag.

Re: Score Decreases/Increases when Personal Loan Paid in Full

Anonymous — Thu, 17 Dec 2020 20:44:45 GMT

Interesting. Any other report changes when comparing those before/after scores?

And increase from 58% installment loan utilization to 86% utilization overall certainly wouldn't warrant an increase in Fico scores. The only other factor would be that you now have 1 less account with a balance, which on EX2 I could see resulting in a 5 point bump.

Re: Score Decreases/Increases when Personal Loan Paid in Full

Anonymous — Thu, 17 Dec 2020 21:08:00 GMT

@Anonymous wrote:
Interesting. Any other report changes when comparing those before/after scores?

And increase from 58% installment loan utilization to 86% utilization overall certainly wouldn't warrant an increase in Fico scores. The only other factor would be that you now have 1 less account with a balance, which on EX2 I could see resulting in a 5 point bump.

There were no other changes.

I did have a mortgage HP credit check in November 2019. However, when that aged 12 months in November 2020, I saw modest 1 point increases. So, I believe that is accounted for. I also had some credit card HPs that aged 12 months several days ago. But, I already saw the increase in points for those and they were also accounted for.

The only other HP checks on file are from Feb and June 2020.

There were no other balance changes.

Re: Score Decreases/Increases when Personal Loan Paid in Full

Anonymous — Thu, 17 Dec 2020 21:10:02 GMT

Understood.

How many total open accounts did you have originally with your first score pull (revolvers + your 2 loans) and how many of them had non-zero reported balances? Whatever that number is, you'd naturally subtract 1 from both the numerator and denominator once the loan closed. What was that percentage both before/after? It should drop slightly... for example, 3/9 (33%) would move to 2/8 (25%).

Re: Score Decreases/Increases when Personal Loan Paid in Full

Anonymous — Thu, 17 Dec 2020 21:44:59 GMT

Yes but how old was the loan you closed and how old is the other existing loan? Also have the revolver:loan metric

Re: Score Decreases/Increases when Personal Loan Paid in Full

Anonymous — Thu, 17 Dec 2020 21:47:26 GMT

BM, is there a metric on age of open revolvers? I always thought that any age-related factor included both open and closed accounts.

Re: Score Decreases/Increases when Personal Loan Paid in Full

Anonymous — Thu, 17 Dec 2020 22:19:25 GMT

@Anonymous wrote:
Understood.

How many total open accounts did you have originally with your first score pull (revolvers + your 2 loans) and how many of them had non-zero reported balances? Whatever that number is, you'd naturally subtract 1 from both the numerator and denominator once the loan closed. What was that percentage both before/after? It should drop slightly... for example, 3/9 (33%) would move to 2/8 (25%).

Before the loan was paid off, it was 6 out of 11 (55%). After, it is 5 out of 10 (50%).

Not sure if this makes any difference, but of those open accounts with balances, i am an Authorized User on 2 of them. If those cards are excluded from the equation then it would be 4 out of 9 and 3 out of 8.

Re: Score Decreases/Increases when Personal Loan Paid in Full

Anonymous — Thu, 17 Dec 2020 22:20:51 GMT

@Anonymous wrote:
Yes but how old was the loan you closed and how old is the other existing loan? Also have the revolver:loan metric

The loan that i closed was a 36 month loan, that i closed at 22 months.

The loan that is still open is a 60 month loan, currently at 10 months old.

Re: Score Decreases/Increases when Personal Loan Paid in Full

Anonymous — Fri, 18 Dec 2020 00:29:19 GMT

@Anonymous wrote:
Before the loan was paid off, it was 6 out of 11 (55%). After, it is 5 out of 10 (50%).

Doesn't seem like a threshold was crossed there. 50% is a well documented number of accounts with a balance threshold, but that means 50% or greater, which both 50% and 55% fall into that same category.

Re: Score Decreases/Increases when Personal Loan Paid in Full

Anonymous — Fri, 18 Dec 2020 01:12:50 GMT

@Anonymous wrote:
BM, is there a metric on age of open revolvers? I always thought that any age-related factor included both open and closed accounts.

@Anonymous not that I'm aware of, but there is a metric that measures the oldest open loan.

Re: Score Decreases/Increases when Personal Loan Paid in Full

Anonymous — Fri, 18 Dec 2020 01:14:38 GMT

There’s also been some evidence that the accounts with a balance Metric includes closed revolvers. But due to the activity Metric, I’ve always wondered whether it only counts active accounts meaning those would’ve had activity in the past whatever period of time they use.

Re: Score Decreases/Increases when Personal Loan Paid in Full

Anonymous — Fri, 18 Dec 2020 05:34:57 GMT

I personally don't believe that it includes closed revolvers. When I did my test back in 2018 number of accounts with a balance thresholds that are well-documented such as 50% on TU and 33% on EQ were easily verified on my end using my open revolvers. If closed revolvers were to count as well the percentage thresholds wouldn't have lined up / been verified.

Re: Score Decreases/Increases when Personal Loan Paid in Full

Anonymous — Fri, 18 Dec 2020 06:17:12 GMT

@Anonymous wrote:
I personally don't believe that it includes closed revolvers. When I did my test back in 2018 number of accounts with a balance thresholds that are well-documented such as 50% on TU and 33% on EQ were easily verified on my end using my open revolvers. If closed revolvers were to count as well the percentage thresholds wouldn't have lined up / been verified.

@Anonymous it was EX2 that showed that evidence only, thus far.

as for a 50% threshold, that doesn't comport with my testing. recently, I just found a 40% threshold and I found 20% in the past. I'm thinking they're 20 - 40 - 60 - 80 - 100. JMHO. This threshold would hold whether it's revolvers or accounts. But it would only count open accounts.

Re: Score Decreases/Increases when Personal Loan Paid in Full

Anonymous — Fri, 18 Dec 2020 06:20:11 GMT

https://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/TU8-and-change-in-of-Accts-w-balance/m-p/6204497#M181057

Re: Score Decreases/Increases when Personal Loan Paid in Full

Anonymous — Fri, 18 Dec 2020 06:21:13 GMT

@Anonymous could you please refer me to some of the threads about the well-documented 50% threshold?

Re: Score Decreases/Increases when Personal Loan Paid in Full

Anonymous — Fri, 18 Dec 2020 06:29:39 GMT

Gotcha, I'm not sure about EX2.

On Score 8, it's possible that 40% could be a threshold on TU. I saw the drop in going from 38% to 50% and always assumed it was 50%, but 40% was crossed en route. With EQ however the largest drop I saw was in going from 25% to 38%, which I figured was crossing a 33% threshold. The shifts I saw were at the following percentages:

TU: 50% (-3), 63% (-1), 88% (-6), 100% (-5)

EQ: 38% (-4), 50% (-2), 75% (-2), 88% (-2)

I found it interesting that the strongest ding from EQ was at a low number shift, where the upper end on TU was more significant.

Re: Score Decreases/Increases when Personal Loan Paid in Full

Anonymous — Fri, 18 Dec 2020 06:37:56 GMT

@Anonymous wrote:
@Anonymous could you please refer me to some of the threads about the well-documented 50% threshold?

I wouldn't begin to know where to look at this point. I'm going off of memory of many threads read in 2016-2017 on here. Once I did my own test in 2018 that was the end of it for me, so I haven't revisited it in quite some time. If further studies/progress has been made since that time on the 50% of accounts with a balance front, I am not aware.

Re: Score Decreases/Increases when Personal Loan Paid in Full

Anonymous — Fri, 18 Dec 2020 06:55:15 GMT

@Anonymous wrote:
Gotcha, I'm not sure about EX2.

On Score 8, it's possible that 40% could be a threshold on TU. I saw the drop in going from 38% to 50% and always assumed it was 50%, but 40% was crossed en route. With EQ however the largest drop I saw was in going from 25% to 38%, which I figured was crossing a 33% threshold. The shifts I saw were at the following percentages:
TU: 50% (-3), 63% (-1), 88% (-6), 100% (-5)
EQ: 38% (-4), 50% (-2), 75% (-2), 88% (-2)

I found it interesting that the strongest ding from EQ was at a low number shift, where the upper end on TU was more significant.

@Anonymous very interesting. What were the percentages before the first ones listed? Looking like it could follow the pattern of 20, 40, 60, 80, 100? Are these percentages from accounts or revolvers? And which scorecard were you in?

Re: Score Decreases/Increases when Personal Loan Paid in Full

Anonymous — Fri, 18 Dec 2020 13:47:23 GMT

Same scorecard as I'm in currently... Thick/clean and I waited until AoYA (a revolver) hit 12 months and my scores all bumped up before doing the test. This was with 7 revolvers and 1 installment loan, so 8 accounts with balances. The percentage points were therefore 13%, 25%, 38%, 50%, 63%, 75%, 88%, 100%. Using those numbers you can see what the previous percentage was. Using the multiples of 20 thresholds would make sense with my numbers on TU, but not EQ as score shifts were seen going from 25% --> 38% and 63% --> 75%.

8 accounts is kind of crappy for doing such a test since there are larger percentage intervals between testing points. I think an ideal amount of accounts with be 11, as bringing one to 9% shifts between testing points would always land someone between two 10's, except for right on with 90% of course but good enough.

Re: Score Decreases/Increases when Personal Loan Paid in Full

Anonymous — Fri, 18 Dec 2020 18:34:16 GMT

@Anonymous wrote:
Same scorecard as I'm in currently... Thick/clean and I waited until AoYA (a revolver) hit 12 months and my scores all bumped up before doing the test. This was with 7 revolvers and 1 installment loan, so 8 accounts with balances. The percentage points were therefore 13%, 25%, 38%, 50%, 63%, 75%, 88%, 100%. Using those numbers you can see what the previous percentage was. Using the multiples of 20 thresholds would make sense with my numbers on TU, but not EQ as score shifts were seen going from 25% --> 38% and 63% --> 75%.

8 accounts is kind of crappy for doing such a test since there are larger percentage intervals between testing points. I think an ideal amount of accounts with be 11, as bringing one to 9% shifts between testing points would always land someone between two 10's, except for right on with 90% of course but good enough.

@Anonymous i'm actually doing some test now taking my number up higher than it's been in a very long time and then coming back down to watch the changes. I actually miscounted and I got to go fix my other thread. maybe it's 30 50 70?

also the experts said that raw number can matter and they implied that could be on young or thin files but maybe it is just more important there? Either way, that may account for why the point losses were higher at a lower number on Equifax.

for example, we know the metric is muted at EX8. Maybe EQ8 uses raw number more heavily than TU8? Just thinking outloud.