Successful PenFed SSL Loan

[SouthJamaica]

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@Patient957 wrote:

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@SouthJamaica wrote:

@Patient957  Question: during the 12 months prior to adding the SSL and paying it down, had you had any new accounts?

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Yes, I had 3.  All credit cards, which are currently 4, 7 and 8 months old.

So my AoYA was equal to my AoYRA.  But now my youngest account is the SSL.

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Thank you very much for getting back to me.

So this leaves me still looking for an answer to my question: whether adding an installment loan account knocks one off the AoYA > 12 months scoreboard.

[Gregory1776]

This is cool. I had one years ago, currently have an open loan (with PenFed) I hope to pay off or I will consider paying down to a very low balance to get the score boost.

10 years is along time, is it harmful to the score if you get a new loan in sometime between now and the end of the loan? 

[GZG]

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@Gregory1776 wrote:

This is cool. I had one years ago, currently have an open loan (with PenFed) I hope to pay off or I will consider paying down to a very low balance to get the score boost.

10 years is along time, is it harmful to the score if you get a new loan in sometime between now and the end of the loan? 

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you'll lose the point boost from not having aggregate loan percentage still owed at under 9 percent, but get it back when that's true again

[Thomas_Thumb]

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@Gregory1776 wrote:

This is cool. I had one years ago, currently have an open loan (with PenFed) I hope to pay off or I will consider paying down to a very low balance to get the score boost.

10 years is along time, is it harmful to the score if you get a new loan in sometime between now and the end of the loan? 

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Yes. Fico looks at aggregate balance to loan ratio for all open installment loans. However, a primary purpose of a SSL loan paid to below 9% B/L is to boost score so you can qualify for better rates on auto or home loans.

[DoppelgangerD]

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@GZG wrote:

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@Gregory1776 wrote:

This is cool. I had one years ago, currently have an open loan (with PenFed) I hope to pay off or I will consider paying down to a very low balance to get the score boost.

10 years is along time, is it harmful to the score if you get a new loan in sometime between now and the end of the loan? 

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you'll lose the point boost from not having aggregate loan percentage still owed at under 9 percent, but get it back when that's true again

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Yeah I can give first hand data points on how much of a hit you'll take when your loan gets paid off and no longer have that boost.

My auto loan was paid off last month and this month it hit the bureaus.

My FICO scores were all above 800, and now all well below 800, by losing 28 points from Experian and 34 points from Equifax.

(Very odd that Transunion's Vantage score did not budge from 811.)

Anyway, how is it that 780 or above is supposed to be the pinnacle of high scores, with anything higher supposedly being meaningless?... however...

My Experian score dropped to 789, but yet my Experian rating went from "Excellent" -> " Very Good".

Wouldn't logic dictate that anything above 780 would be considered "Excellent"?

If not, please enlighten me.

[SouthJamaica]

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@DoppelgangerD wrote:

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@GZG wrote:

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@Gregory1776 wrote:

This is cool. I had one years ago, currently have an open loan (with PenFed) I hope to pay off or I will consider paying down to a very low balance to get the score boost.

10 years is along time, is it harmful to the score if you get a new loan in sometime between now and the end of the loan? 

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you'll lose the point boost from not having aggregate loan percentage still owed at under 9 percent, but get it back when that's true again

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Yeah I can give first hand data points on how much of a hit you'll take when your loan gets paid off and no longer have that boost.

My auto loan was paid off last month and this month it hit the bureaus.

My FICO scores were all above 800, and now all well below 800, by losing 28 points from Experian and 34 points from Equifax.

(Very odd that Transunion's Vantage score did not budge from 811.)

Anyway, how is it that 780 or above is supposed to be the pinnacle of high scores, with anything higher supposedly being meaningless?... however...

My Experian score dropped to 789, but yet my Experian rating went from "Excellent" -> " Very Good".

Wouldn't logic dictate that anything above 780 would be considered "Excellent"?

If not, please enlighten me.

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Yes, logic would dictate it. But what does logic have to do with any of this? If logic were the determinant, you would have been rewarded, rather than penalized, for paying off a loan.

In any event, such characterizations as "Excellent" and "Very Good" are not part of any scoring system, but are merely front end "fluff" for reader entertainment and engagement.

[Thomas_Thumb]

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@DoppelgangerD wrote:

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@GZG wrote:

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you'll lose the point boost from not having aggregate loan percentage still owed at under 9 percent, but get it back when that's true again

---

My auto loan was paid off last month and this month it hit the bureaus.

My FICO scores were all above 800, and now all well below 800, by losing 28 points from Experian and 34 points from Equifax.

Anyway, how is it that 780 or above is supposed to be the pinnacle of high scores, with anything higher supposedly being meaningless?

My Experian score dropped to 789, but yet my Experian rating went from "Excellent" -> " Very Good".

Wouldn't logic dictate that anything above 780 would be considered "Excellent"?

If not, please enlighten me.

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The rating drop from excellent to very good is one thing. It's the color change of the circles from deep green to yellow that shocked me. I was traumatizd. Recovery has been difficult but, one must soldier on when faced with such adversity.

Still, I prefer the freedom of being debt free even if it means being snubbed.

[masscredit]

I currently have a SSL from Andrews. It's not something I was able ot quickly pay down to under 9%. I could only pay a couple months in advance. I finally got it down to under 9% last week. I got a decent score bump when it reported. That ranged from 8-16 points between the 3 CBs. I remember picking up some points when the loan first started reporting about 2 1/2 years ago. I either got it just before my BK was discharged or right after so anything would help at that point. 

I used the PenFed prequalification page to see if they'd approve me for anything a few month ago (I burned them in BK). I was very surprised to see an approval for a regular loan. I'm guessing I should be good for the SSL. Current one will be paid off in November so I'll be doing this in the next couple of months. 

[Thomas_Thumb]

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@masscredit wrote:

I currently have a SSL from Andrews. It's not something I was able ot quickly pay down to under 9%. I could only pay a couple months in advance. I finally got it down to under 9% last week. I got a decent score bump when it reported. That ranged from 8-16 points between the 3 CBs. I remember picking up some points when the loan first started reporting about 2 1/2 years ago. I either got it just before my BK was discharged or right after so anything would help at that point. 

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^ This is a diamond in the rough data point. It shows dropping below 9% B/L on an aged loan has a substantially smaller impact (8-16 points) than many people are led to believe. Why?

1) Aging of the open loan itself adds points. 2) There is a B/L threshold above 50%.  As a result, fewer points are available to be awarded when B/L drops below 9%. In the case of a profile with only a mortgage, paid down according to schedule, 0 points left by the time 9% B/L is reached.

Taking out the SSL and promptly paying it to below 9% provides a shortcut to installment score boost without the need to age - imo.

[Snook_on_the_Line]

@Patient957 

Did the $2900 you paid then become available in your share account to transfer out, or is it tied up for the life of the loan?