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Starting to question did I kick myself in the butt again....

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New Contributor

Starting to question did I kick myself in the butt again....

So I open my FICO scores this am and I was happy to see that my 23k in student loans were paid in full (I'm 100% VA) well that was one of my oldest open accounts and it dropped me 11 more points it seems like no matter what I do I drop points at every turn. I'm so tired of credit sometimes... I mean 23k in debt gone is nice but 11 points isn't cool.

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Super Contributor

Re: Starting to question did I kick myself in the butt again....


@MrMarlow3 wrote:

So I open my FICO scores this am and I was happy to see that my 23k in student loans were paid in full (I'm 100% VA) well that was one of my oldest open accounts and it dropped me 11 more points it seems like no matter what I do I drop points at every turn. I'm so tired of credit sometimes... I mean 23k in debt gone is nice but 11 points isn't cool.


Was that your only installment loan?

 

For scoring purposes, FICO algorithm wants one open installment (auto, student, mortgage, SSL) loan. You'll reap maximum points when utilization is 8.9% or lower. If APR is low, it's recommended to keep an installment loan open as long as possible. Once that loan is closed, you lose those points.

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Valued Contributor

Re: Starting to question did I kick myself in the butt again....

The reason you lost points is not because you paid your loan, but because it was your only loan that has been paid off now. 




My Cards:






Profile Type: New, Thick, 100% Clean
INQ's: EQ: 0 TU: 1 EX: 3 (last 12 mo.)
Recent Accounts: 4 (last 24 mo.)
Total CL: 28.95k Util. 3% AAoA: 1yr, 8mo.
AoOA: 2 yrs, 8 mo. AoYA: 0 mo. 100% PIF.





myFICO Member since: July 21, 2018 | Joined Community: Aug. 17, 2018 | Starting Scores: EQ: 716 TU: 738 EX: 698
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New Contributor

Re: Starting to question did I kick myself in the butt again....

So next month when my self lender reports will I regain some of those points?

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Super Contributor

Re: Starting to question did I kick myself in the butt again....


@MrMarlow3 wrote:

So next month when my self lender reports will I regain some of those points?


How long is the self lender term, 12 months?

 

If you are on a derogatory scorecard, you will not get a new account penalty. However, you may or may not get a penalty for reducing your AoYA and AAoA.

 

You may realize a penalty for 100% installment loan utilization. You will only see score improvement as the utilization gets lower. As stated up thread, once at 8.9% UTI will you see the maximum score gain, e.g. month 11. However, it will be short lived once that loan is closed, e.g. after month 12.

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New Contributor

Re: Starting to question did I kick myself in the butt again....

Yes it's 12 months. I only have 3 open accounts now 3 secured credit cards all opened within the last 3-4 months. Almost a full rebuild. I have some charge offs I've taken care off just recently waiting for them to be updated on credit report. But those accounts are all closed I have no opened house or car loans nothing I read that I'm considered a thin file but I have a ton of closed accounts?

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Super Contributor

Re: Starting to question did I kick myself in the butt again....


@MrMarlow3 wrote:

Yes it's 12 months. I only have 3 open accounts now 3 secured credit cards all opened within the last 3-4 months. Almost a full rebuild. I have some charge offs I've taken care off just recently waiting for them to be updated on credit report. But those accounts are all closed I have no opened house or car loans nothing I read that I'm considered a thin file but I have a ton of closed accounts?


IIRC, open and closed accounts are both factored into score card assignment. Thus, you do not have a thin file.

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Super Contributor

Re: Starting to question did I kick myself in the butt again....

Correct, closed accounts showing on your CR do count towards thick/thin, so you are thick.

However installment loans do not reset AoYA, that’s why we’ve begun to refer to it as AoYR or AoYRA. Besides that, that is where the new account penalty is derived, by age of youngest revolver going under 12 months.

Age of the youngest revolver, formerly thought to be age of youngest account, is a scorecard segmenter; therefore when your youngest revolver becomes 12 months old you go through scorecard reassignment.

If you apply for a new card, then your age of youngest revolver is reset to one month, your scorecard is reassigned into a “new account” scorecard and you’ll lose those points again, until it reaches 12 months and you’re reassigned again and receive them back.
-Our Community’s updated scoring wisdom: Link to Scoring Primer.
-For Negative Reason Codes see: CassieCard’s Score Factors thread.
-ccquest’s workbook to calculate metrics for you: Link to Workbook.

Nov 2020, Clean/Thick/Mature/No New Account Scorecard (EX9 not updated yet. Oldest/avg varies. Estimates above.)
Real world mortgage maxes are: EQ5-818, TU4-839, EX2-844.


RIP:
(Everything said is JMHO and is not endorsed by FICO or MF. I have no affiliation with either, just a grateful member.)
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