@775orbust wrote:My credit was in a pretty good place, but a month ago I paid off my only installment loan and my score plummeted up to 20 points. I am looking into getting a new car. It is 36k. I figured this would be help with increasing my score or wouldnt it be?
My goal is to have a higher mortgage score to qualify for good mortgage rates. I included what I owe below. I can pay off all of my consumer debt right now but was fearful in doing so as I'm afraid of another credit score plunge. Please help me devise the most optimal plan and getting my score up. I'm desperate, worried and scared I'll never be able to get a reason able mortgage.
These are my scores:
Equifax 708, mortgage score 708
Transunion 746, mortgage score 701
Experian 736, mortgage score 709
I owe:
Capital one $179.70/$3500
Discover $670/$5500
PayPal $294/$2900
Student loans:
Aes- owe $4200
Great lakes- owe $15000
If you can get the cards paid down to AZEO that will help. If you have the funds. Get rid of Great Lakes and leave AES as your lonely installment loan and pay it below 8%. You'll be in FICO bonus land then.
@dragontearsStudent loans are like any other installment loans. Add up whatever the starting credit lines for the 2 loans. Then add up the balances and substract that from the original credit lines. Theres your util %. Paying off the 1 loan not knowing what the original credit line was on the larger balance. It leaves the 1 loan at whatever % which will help with overall util on the installments and it will help mortgage scores due to lower util and less DTI.
@dragontears wrote:
@FireMedic1 wrote:@dragontearsStudent loans are like any other installment loans. Add up whatever the starting credit lines for the 2 loans. Then add up the balances and substract that from the original credit lines. Theres your util %. Paying off the 1 loan not knowing what the original credit line was on the larger balance. It leaves the 1 loan at whatever % which will help with overall util on the installments and it will help mortgage scores due to lower util and less DTI.
Well if loan utilization actually had a large effect on MORTGAGE scores you would be right, however there is almost no effect that any one has found, unless you have personal data points to add that says otherwise?
Paging @SouthJamaica as he did a lot of testing in this area.
When I pass the major milestones in installment utilization (9% and 0%), my TU FICO 4 has respondend similarly to my FICO 8's but with much less signal strength. E.g., a 30 point gain in FICO 8 might be worth 6 or 7 points in TU FICO 4. Neither EX 2 nor EQ 5 budged a point.
@Revelatefound that he had a similarly weak reaction in EX FICO 2, and no reaction at all in TU FICO 4 or EQ FICO 5. Bottom line we each had a slight change in one score and no change in the other two.
