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Utilization after rehab

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Valued Contributor

Utilization after rehab

So, I couldn't easily find the answer to my question(s).

 

I am wondering if after SL rehabs and they are transferred or restored to a servicer if the loans then become 100% or remain at the 100%+ util when it comes to reporting?

 

I am very excited to complete my rehabs, but also terrified, as some of my SLs are at nearly 500% util. I can hope they come down a bit perhaps after some of the collection costs are cut (or maybe they aren't even being factored in, yikes!), but I am wondering if I am going to be digging myself out from under these SLs for years to come.

 

I have been working so hard on my credit amd it makes me insanely nervous.

 

Is there penalty for the SLs being over 100%? I guess if not, I will not worry about it, but if it does, I feel incredibly stuck.

 

I always get the reason code of installment loan balances too high and shows 0% paid off.

 

Any insight into reported util after rehab from those that have gone through this would be greatly appreciated!

 

Thanks!




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1 REPLY 1
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Senior Contributor

Re: Utilization after rehab


@LaHossBoss wrote:

So, I couldn't easily find the answer to my question(s).

 

I am wondering if after SL rehabs and they are transferred or restored to a servicer if the loans then become 100% or remain at the 100%+ util when it comes to reporting?

 

I am not 100% sure, but I believe they do.   Consolidation will put it at 100% because it's a new tradeline, but I believe rehabbed loans keep their original amounts along with their original open-dates (it's been a LONG time since I rehabbed, though).
I'll let someone who has had a recent rehab answer for sure.

 

Is there penalty for the SLs being over 100%? I guess if not, I will not worry about it, but if it does, I feel incredibly stuck.

 


From previous data from many users, it appears that if there is one, it's negligible.   Any penalty appears to be smaller than the boost you get from the presence of an installment.
Installments utilization (including SLs) has been shown to have a minimal effect on scores until it's below the 9% threshhold.  
There's been some anecdotal evidence for other utilization threshholds, but the only consistent data appears to revolve around mortgages.

 

And for some additional anecdotal blurbs:
I've been tracking utilization (individual and aggregate since I got a second loan), and I've seen little to no movement in paydown when I cross the x8.9% util threshholds (and I do my best to isolate, the forebearance/0% has made that a lot easier!).
Hilariously, I have both "installment loan balance too high" as a negative code as well as "substantial installment paydown" as a positive, so I guess ymmv, but everything I read in the FICO scoring forum seems to indicate you don't have much to worry about.

Current util standing is SL @ <48.9%, Auto @ ~73%, Agg util @ <58.9%




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