topic Re: Clarification on 'Accounts with Balances'.. in Understanding FICO® Scoring

Clarification on 'Accounts with Balances'..

GFer — Sun, 28 Dec 2008 02:57:13 GMT

Does FICO include all accounts--meaning installments, mortgages, etc, as well as revolving accounts?

Re: Clarification on 'Accounts with Balances'..

wmarat — Sun, 28 Dec 2008 02:58:06 GMT

Yes

Re: Clarification on 'Accounts with Balances'..

GFer — Sun, 28 Dec 2008 03:02:24 GMT

TY!

One more question, please. (I think I may have asked this before...)

If I have two installments reporting (student loan and auto) and pay off auto will I receive a point gain? I mean, I know installments count for next to nothing in points, but simply because I will have less accounts reporting balances? Maybe, with TU, since they seem to 'dwell' on that? LOL

Re: Clarification on 'Accounts with Balances'..

wmarat — Sun, 28 Dec 2008 03:07:09 GMT

When I paid off my autoloan, I got 3 points on EQ.

Re: Clarification on 'Accounts with Balances'..

GFer — Sun, 28 Dec 2008 03:16:10 GMT

Thanks!

I don't expect any FICO love from EQ though....(see signature)

Although, it sure would be nice! I can live with less debt though.

Re: Clarification on 'Accounts with Balances'..

cobaltnv — Sun, 28 Dec 2008 03:30:10 GMT

GFer, I have both a student loan and an auto loan as well. When I paid off my auto loan in a lump sum 14 months early I got a boost of ~10-15 points. YMMV of course.

It seems like as long as you have one installment loan you get the points for the credit mix.

Cheers

Re: Clarification on 'Accounts with Balances'..

GFer — Sun, 28 Dec 2008 04:27:02 GMT

Wow! That would sure be nice! Actually 3 or 15 with EQ would be nice...

Seems here lately, I've done all I can do (outside of NOT apping!) Just age and ontime payments. I really do have a lot of old baddies. Yes, they are aging, but so am I! Thanks for the hope though!

Re: Clarification on 'Accounts with Balances'..

RobertEG — Sun, 28 Dec 2008 06:17:36 GMT

It depends upon which scoring category you are considering.

FICIO looks at all accounts, open or closed, to determine your average age of accounts. Paying off an installment loan does not drop it from AAOA calculation, so it does not hurt in that category.

But paying off, and thus closing, an installment loan can influence credit mix.

How much, I do not know. I would love to hear an answer from someone who knows the FICO scoring algorithm.

Once an installment loan is paid, does it still enter into the credit mix category, or does it simply poof?

Are only open install accounts scored in credit mix?

Re: Clarification on 'Accounts with Balances'..

cobaltnv — Sun, 28 Dec 2008 06:42:13 GMT

Robert,

The case I am talking about (and GFer was asking about) involves paying off an installment loan (car) when one has another installment loan (Student loan) still active. Therefore, in our situation there is no worry about closing the only installment loan.

The consensus on the closed installment loans seems to be that they do not count toward your credit mix. But I am with you I would love to hear someone who knows the scoring model state this explicitly. Seems like many on here have seen a bit of a FICO hit when closing their only installment loan, which I suppose is where this whole idea that "installment loans no longer count when closed" came from.

Cheers!

Re: Clarification on 'Accounts with Balances'..

cobaltnv — Sun, 28 Dec 2008 06:54:47 GMT

GFer,

I went back to my credit reports to make sure I was remembering this all correctly and to get a more accurate answer for you. My EX score went from 791 (October) to 804 (Dec). Utilization was about the same for both scores (<1%). Other than paying off my car loan a credit card I am AU on had its 1st birthday (I had forgot about that). So my original post is probably a little optimistic and it is difficult to say which of the two factors played the larger role in my score increase. I would say the less overall debt and fewer accounts reporting balances is probably worth a few points at least

Cheers

Re: Clarification on 'Accounts with Balances'..

smallfry — Sun, 28 Dec 2008 15:12:33 GMT

Robert once you pay off an installment it no longer continues to be counted toward your credit mix.