I'm in the process of consolidating several student loans. Five of them just reported as zero balance, but the new consolidation loan hasn't shown up yet, meaning the only credit report change so far is, five loans went from "pays as agreed" to closed/paid.
just from that -- I checked -- my score dropped ten points!!!!
Any idea why/how that works??
Gardening since May 2015
"Credit mix" was my first thought too. But consolidation didn't wipe all of my installment loans; I still have two more unconsolidated.
Hmm. I wonder if it will bounce back once everything is updated.
@bdhu2001 wrote:
@ACG23 wrote:"Credit mix" was my first thought too. But consolidation didn't wipe all of my installment loans; I still have two more unconsolidated.
Hmm. I wonder if it will bounce back once everything is updated.
Are the other two reporting correctly? On one of the CBAs my second mortgage shows as Revolving Credit instead of Installment.
Interesting question! They are reporting correctly. The only other thing I can think of is, the loans being consolidated -- therefore, the lines that appear "closed" by repayment now -- represented all of my 100% positive installment accounts. The remaining two tradelines report (accurate) negative information from about a year ago.
@ACG23 wrote:
@bdhu2001 wrote:
@ACG23 wrote:"Credit mix" was my first thought too. But consolidation didn't wipe all of my installment loans; I still have two more unconsolidated.
Hmm. I wonder if it will bounce back once everything is updated.
Are the other two reporting correctly? On one of the CBAs my second mortgage shows as Revolving Credit instead of Installment.
Interesting question! They are reporting correctly. The only other thing I can think of is, the loans being consolidated -- therefore, the lines that appear "closed" by repayment now -- represented all of my 100% positive installment accounts. The remaining two tradelines report (accurate) negative information from about a year ago.
Shouldn't have made a difference there, payment history is payment history regardless of whether the tradeline is opened or closed.
I think we need to update the mix of credit term to mean open accounts, since it's getting increasingly hard to distinguish it otherwise. We've seen where people without a few open installment loans take a hit, and I'd always stated it was at 2 open installment loans for optimal scoring, but it could be higher than that too in some cases.
Also as a caveat which has to be stated, if you're doing consolidation loans and other stuff, your report is non-trivially busy which does make it somewhat hard to isolate it. I'm patiently waiting on my EQ report for my auto loan to be paid off next month, and one of my secured installment loans to be paid in November: it's possible I might see a change going from 4 to 3, or 3 to 2... though I didn't appear to get a bump going from 2 -> 4 in the opposite direction so I'm not certain on that, but I had an AAOA change in there too and as such it might've skewed the data on 3->4.
We just need more data unfortunately, but closed vs. open status does indeed count in the FICO 8 algorithm.
@Revelate wrote:
@ACG23 wrote:
@bdhu2001 wrote:
@ACG23 wrote:"Credit mix" was my first thought too. But consolidation didn't wipe all of my installment loans; I still have two more unconsolidated.
Hmm. I wonder if it will bounce back once everything is updated.
Are the other two reporting correctly? On one of the CBAs my second mortgage shows as Revolving Credit instead of Installment.
Interesting question! They are reporting correctly. The only other thing I can think of is, the loans being consolidated -- therefore, the lines that appear "closed" by repayment now -- represented all of my 100% positive installment accounts. The remaining two tradelines report (accurate) negative information from about a year ago.
Shouldn't have made a difference there, payment history is payment history regardless of whether the tradeline is opened or closed.
I think we need to update the mix of credit term to mean open accounts, since it's getting increasingly hard to distinguish it otherwise. We've seen where people without a few open installment loans take a hit, and I'd always stated it was at 2 open installment loans for optimal scoring, but it could be higher than that too in some cases.
Also as a caveat which has to be stated, if you're doing consolidation loans and other stuff, your report is non-trivially busy which does make it somewhat hard to isolate it. I'm patiently waiting on my EQ report for my auto loan to be paid off next month, and one of my secured installment loans to be paid in November: it's possible I might see a change going from 4 to 3, or 3 to 2... though I didn't appear to get a bump going from 2 -> 4 in the opposite direction so I'm not certain on that, but I had an AAOA change in there too and as such it might've skewed the data on 3->4.
We just need more data unfortunately, but closed vs. open status does indeed count in the FICO 8 algorithm.
Thanks! I was assuming that it probably would be indecipherable, but I wanted to see if I was missing something. (It seems I am not.) To make matters even more "non-trivially busy" (excellent term, by the way), I also opened two credit cards. So. There is a lot going on. I don't think the dust will settle before October, by which time I hope to have a stable score above 700. Hopefully the added CLs, lower UTIL, and closed-by-paid accounts will help.