@Anonymous wrote:
In June I got an installment loan from my credit union. Then in August I read here about paying it down but only if it doesn't effect your payoff date. I called the credit union and they didn't understand my questions about early paydown so I decided to just try and pay extra one month to see if it would effect my pay off date. Longggg story short my loan will now be paid off in February instead of June.
No big deal right? Well, we are still house hunting so I'm concered that my only installment loan will be paid off before we get a home loan and tank my mortgage scores. Can't get a new loan as the hard pull will hurt me and it's advised to avoid opening new accounts 6months prior to applying for a mortgage. 😭
Any advice?
The mortgage scores don't react like FICO 8 reacts to installment utilization changes.
In my experience the TU mortgage score reacts slightly to them, while the EX and EQ mortgage scores do not react at all.
@Revelate reported something different, as to which bureau mortgage score reacted slightly, and which two did not react at all, but it was still one score reacting slightly and two not at all.
@Anonymous wrote:Two of the three mortgage scores are unaffected by the amount you owe on your loans. The other score is affected. Most of the veterans here believe that is Experian, though SouthJ may have had a different experience. I have wanted someone to retest that so we could have a definative answer, but no one has done that yet.
Let's assume for a second that it is Experian. If so, when the loan pays off you will lose about 20-30 points. If so, what would that do to your middle mortgage score?
Yes @Anonymous, in my profile it has consistently been TU FICO 4 which reacts, and EQ FICO 5 and EX FICO 2 which have been completely indifferent. But even the TU score did not react nearly as strongly as FICO 8 and FICO 9. I would estimate that the signal strength was 20%. I.e. if TU FICO 8 went down 30 points, TU FICO 4 went down ~6 points.
@Anonymous wrote:
Losing 20-30 points on hubbys middle score of 700 will kill us 😭
What are some options?
I don't think you would lose 20-30 points, more like 4-6 at most, and maybe none at all.