Is this your only installment account?
@CH-7-Mission-Accomplished wrote:I have an auto loan from Alliant. I got the loan in January 2019 and have been paying it down quickly.
Original loan amount - $30,251
Alliant updates balances on last day of month; updated balance appears on reports 1-3 days later
7/31/2020 Balance - $5500 (18.18% remaining)
8/31/2020 Balance - $3000 (9.92% remaining)
So I passed under 10% "utilization." Updated installment loan was the only change from 9/1 to 9/3FICO 8 changes:
EX^4
EQ^8
TU^7
The loan is paid ahead until 1/25/2024
I will pay it down to precisely 8.9% for 9/30 reporting and see if/what additional points I gain for hitting 8.9%.
Everybody's profile is different. This is just my data point.
Cool. If this is your only open loan then you should see a nice spike in your FICO 8 and 9 scores when you get it down safely to 9%.
@CH-7-Mission-Accomplished wrote:I have an auto loan from Alliant. I got the loan in January 2019 and have been paying it down quickly.
Original loan amount - $30,251
Alliant updates balances on last day of month; updated balance appears on reports 1-3 days later
7/31/2020 Balance - $5500 (18.18% remaining)
8/31/2020 Balance - $3000 (9.92% remaining)
So I passed under 10% "utilization." Updated installment loan was the only change from 9/1 to 9/3FICO 8 changes:
EX^4
EQ^8
TU^7
The loan is paid ahead until 1/25/2024
I will pay it down to precisely 8.9% for 9/30 reporting and see if/what additional points I gain for hitting 8.9%.
Everybody's profile is different. This is just my data point.
Was there any change in your mortgage scores, too? I suspect not, but curious.
@Anonymous wrote:Interesting that the OP saw point gains when no (that I know of) threshold was crossed. Anyone think it could be a false positive and caused by something else?
Yes it could have been caused by something else. But who knows in this crazy world of FICO scoring. I personally don't recall seeing any gain by paying down in that neighborhood, but maybe OP did.
If not, does anyone have a guess as to where the breakpoint was?
While I noticed some slight gains on the way down, I never saw anything definitely attributable to the loan payoff until I got down to 9%. But as you may recall, ever since I've been drinking the MyFICO koolaid I have had a fairly busy profile. And it is only in the last 2 years or so that I've had daily access to experian.com, which has definitely enhanced by observation capabilities.
I agree with SJ that nice gains will be seen once approximately another percentage point is paid down and reports.
@Anonymous wrote:My understanding (SJ can chime in on this) is that crossing the 8.9% threshold on aggregate installment loan utilization usually results in an increase of at least twice, perhaps even 3X what you saw from the utilization drop you mentioned in the original post.
In my case I got very few points on the way down from 90% to 14%, but when I made the next move to 9% I got around 25-30 points as I recall. And I believe most other folks have reported similar numbers. Personally I don't think 9.9% cuts it, because I believe that gets rounded up to 10%.
I also the 8.9% threshold point at this stage of the game has been tested many times and essentially confirmed to be significant... so I don't really think it's all too profile dependent.
Agreed
Perhaps signal strength of the threshold could matter more/less depending on profile, that's not out of the question. But, if 8.9% is a confirmed significant point, it would just seem odd to me that 1% difference at 9.9% would also be noteworthy. That's not to say that it can't, but to me that doesn't really feel probable. I would think that more people that have paid down their loans in a more "traditional" way of one identical payment per month that have seen the balance slowly/steadily drop would have found a data point crossing 9.9% if it indeed is a thing.