Credit Mix/Scoring and a Completed Loan

[Anonymous]

Hi y'all.  I have a question regarding credit scoring and improving my credit mix and how that may be affected in the future when I finish paying off a loan, and a more general complaint/surprise at the way my most recent auto loan affected my scores (specifically my TransUnion score).

So I recently got an auto loan 2.89% on $5k over 36 months on a used SUV. Nasa Federal Credit Union is awesome! I have the cash, but my overall credit goal is a mortgage and I have no installment loan history, so to bulk up for a future manual review (and for my own budgeting purposes), I took out the loan. My other goal was bumping my score by improving my credit mix as I only have one credit card at the moment. When my score was pulled for the loan it was 802! (EQ).  My TU score, according to my free tracker in mint.com was 735 at the time. My EX score according to my bank tracker was 793.

My EX score actually increased post-loan to 795, but my TU score dropped by 45 points. I'm assuming a huge piece of this is AAoC which now averages out to just under 2 years, as I only have one credit card and it's still pretty new. Also the proportion of the loan balance to total and the hard pull for the loan likely affected things.  So that's shocking and I'm feeling pretty whiny about it, but I'm hoping as I pay on the loan and my AAoC ages, it'll be okay. (Right?!)

My question is, and it's been asked before but not answered definitively.  Will the bump in score I'll eventually see for my credit mix stay once I pay off the loan?? (I know there's the whole SS option for extending the length on the loan), but that's not my question.  Will I lose my credit mix points when I pay off the loan?  Do you think I'll still have an overall bump from having a solid installment payment history? Or will that bump just come up in a manual review?

[thornback]

The TU score from Mint is, I believe, a Vantage 3 score, not FICO.  Your TU FICO likely also increased due to adding the loan.  Vantage behaves much differently in how it weighs various factors of, and changes to, your profile.  Vantage & FICO scores can differ by as much as +/- 100 points on some profiles.   FICO is what the majority of lenders use to make credit decisions. 

You get "bonus" points once the loan is paid down to less than 8.9% of the original loan amount.   Once you pay off the loan, you will lose those bonus points but the points gained for improved credit mix should remain as the closed paid loan will continue to be a record on your reports for ~10 years after the closing date.  

[Anonymous]

Thornback!! Awesome! Thanks for this clear answer.  You're right (I just double checked, Mint's TU score is the Vantage Score).  I'm happy to hear the loan will stay on for 10 years and I'll just keep making on time payments and chipping away at it.  I read on another forum that 2 years is what creditors want to see in terms of installment loan history, so while I'm paying above the minimum, I'm going to make payment amounts that extend the loan at least 2 years / 24 months to maximize the benefit. 

[thornback]

Excellent, sounds like a great plan.  Best of luck!!