cancel
Showing results for 
Search instead for 
Did you mean: 

Another closed loan causing another small decrease in FICO8

dragontears
Valued Contributor

Another closed loan causing another small decrease in FICO8

So I recently sold my rental property resulting in the mortgage being reported as paid/closed. As circumstances would happen I received notification of the closed loan well away from the reporting of any of my cards.

Contrary to popular belief my FICO 8 decreased a few points. I  still have an open mortgage, auto loan and 2 personal loans. Original amount for the now closed mortgage was 161k

SmartSelect_20210115-105144_Samsung Internet.jpg

 

Don't ask about reason codes as myFICO doesn't supply them when your score is >800.

Scores hover around 800
Haven't been AZEO in over a year
Rome was not built in a day, neither is a good credit profile
Message 1 of 12
11 REPLIES 11
SouthJamaica
Super Contributor

Re: Another closed loan causing another small decrease in FICO8


@dragontears wrote:

So I recently sold my rental property resulting in the mortgage being reported as paid/closed. As circumstances would happen I received notification of the closed loan well away from the reporting of any of my cards.

Contrary to popular belief my FICO 8 decreased a few points. I  still have an open mortgage, auto loan and 2 personal loans. Original amount for the now closed mortgage was 161k

SmartSelect_20210115-105144_Samsung Internet.jpg

 

Don't ask about reason codes as myFICO doesn't supply them when your score is >800.


Sorry I don't know what "popular belief"  you feel you have challenged here.

 

 

Message 2 of 12
dragontears
Valued Contributor

Re: Another closed loan causing another small decrease in FICO8


@SouthJamaica wrote:

@dragontears wrote:

So I recently sold my rental property resulting in the mortgage being reported as paid/closed. As circumstances would happen I received notification of the closed loan well away from the reporting of any of my cards.

Contrary to popular belief my FICO 8 decreased a few points. I  still have an open mortgage, auto loan and 2 personal loans. Original amount for the now closed mortgage was 161k

SmartSelect_20210115-105144_Samsung Internet.jpg

 

Don't ask about reason codes as myFICO doesn't supply them when your score is >800.


Sorry I don't know what "popular belief"  you feel you have challenged here.

 

 


Popular belief I am referring to is that closing loans have no effect on FICO 8 unless there is a change in total loan utilization. You have posted that belief before....

Scores hover around 800
Haven't been AZEO in over a year
Rome was not built in a day, neither is a good credit profile
Message 3 of 12
BrutalBodyShots
Super Contributor

Re: Another closed loan causing another small decrease in FICO8

Are you saying that there was no shift at all in your aggregate installment loan utilization with the closure of the one loan? 

 

Also as you are well aware, alert reasons aren't always tied to score changes and other things can be going on outside of reported balances.

Message 4 of 12
dragontears
Valued Contributor

Re: Another closed loan causing another small decrease in FICO8


@BrutalBodyShots wrote:

Are you saying that there was no shift at all in your aggregate installment loan utilization with the closure of the one loan? 

 

Also as you are well aware, alert reasons aren't always tied to score changes and other things can be going on outside of reported balances.


The shift was miniscule, I have a >300k mortgage that is less than a year old which overshadows all other loans. 

 

Yes, I am fully aware that alerts and score changes are not always tied to each other. But my profile is pretty stable and there was no other changes that I can see.

Scores hover around 800
Haven't been AZEO in over a year
Rome was not built in a day, neither is a good credit profile
Message 5 of 12
BrutalBodyShots
Super Contributor

Re: Another closed loan causing another small decrease in FICO8

The next thing I would look to then is your loan to revolver ratio before/after the loan closure.

Message 6 of 12
thornback
Senior Contributor

Re: Another closed loan causing another small decrease in FICO8


@BrutalBodyShots wrote:

The next thing I would look to then is your loan to revolver ratio before/after the loan closure.


What is this loan to revolver ratio of which you speak, @BrutalBodyShots?  I don’t think I've read about this yet and I'm curious --  you have a thread ink handy? 

Personal Aphorism:
"Forget What You Feel, Remember What You Deserve"


Starting FICO 8s | 09/2017: EX 641 ✦ EQ 634 ✦ TU 647
Current FICO 8s | 11/2020: EX 780 ✦ EQ 771 ✦ TU 781
Current FICO 9s | 11/2020: EX 793 ✦ EQ 780 ✦ TU 778
2020 Goal Score | 800s


My AAoA: 3.8 years not incl. AU / 4 years incl. AU
My AoOA: 7.10 years not incl. AU / 9.10 years incl. AU
Inquiries: EX 0/6 | 1/12 ✦ EQ 1/6 | 2/12 ✦ TU 0/6 | 1/12
Report Status: Clean


Without patience, we will learn less in life. We will see less. We will feel less. We will hear less. Ironically, rush and more usually mean less.
Message 7 of 12
BrutalBodyShots
Super Contributor

Re: Another closed loan causing another small decrease in FICO8

Here's a thread that discusses revolver to loan ratio from a couple of months back:

https://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Ratio-of-loans-revolvers/td-p/6160271

 

My understanding is that it is believed that somewhere in the range of 3:1 or 4:1 is considered to be ideal.  How much that may impact Fico scores I doubt anyone really knows at this point, especially across different scorecards.

 

 

Message 8 of 12
thornback
Senior Contributor

Re: Another closed loan causing another small decrease in FICO8


@BrutalBodyShots wrote:

Here's a thread that discusses revolver to loan ratio from a couple of months back:

https://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Ratio-of-loans-revolvers/td-p/6160271

 

My understanding is that it is believed that somewhere in the range of 3:1 or 4:1 is considered to be ideal.  How much that may impact Fico scores I doubt anyone really knows at this point, especially across different scorecards.

 

 


TY! 

Personal Aphorism:
"Forget What You Feel, Remember What You Deserve"


Starting FICO 8s | 09/2017: EX 641 ✦ EQ 634 ✦ TU 647
Current FICO 8s | 11/2020: EX 780 ✦ EQ 771 ✦ TU 781
Current FICO 9s | 11/2020: EX 793 ✦ EQ 780 ✦ TU 778
2020 Goal Score | 800s


My AAoA: 3.8 years not incl. AU / 4 years incl. AU
My AoOA: 7.10 years not incl. AU / 9.10 years incl. AU
Inquiries: EX 0/6 | 1/12 ✦ EQ 1/6 | 2/12 ✦ TU 0/6 | 1/12
Report Status: Clean


Without patience, we will learn less in life. We will see less. We will feel less. We will hear less. Ironically, rush and more usually mean less.
Message 9 of 12
dragontears
Valued Contributor

Re: Another closed loan causing another small decrease in FICO8


@BrutalBodyShots wrote:

The next thing I would look to then is your loan to revolver ratio before/after the loan closure.


Ok so 12 open cards

Before: 12 cards:5 loans = 2.4:1

After: 12 cards:4 loans = 3:1

 

Scores hover around 800
Haven't been AZEO in over a year
Rome was not built in a day, neither is a good credit profile
Message 10 of 12
Advertiser Disclosure: The offers that appear on this site are from third party advertisers from whom FICO receives compensation.