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Auto Loan/Fico Score

AyaMai
Valued Member

Auto Loan/Fico Score

Lowering the auto loan balance of $18800 does it have any effect on increasing my score. My credit cards utlization of 100K is between 0% - 1% 

Message 1 of 9
8 REPLIES 8
SouthJamaica
Mega Contributor

Re: Auto Loan/Fico Score


@AyaMai wrote:

Lowering the auto loan balance of $18800 does it have any effect on increasing my score. My credit cards utlization of 100K is between 0% - 1% 


It might or might not, depending on what other loans you have, if any, and on how much you lower it.


Total revolving limits 689000 (587000 reporting) FICO 8: EQ 718 TU 721 EX 698

Message 2 of 9
FireMedic1
Super Contributor

Re: Auto Loan/Fico Score

Whats your scores now? If your util is 1%. Doesnt matter what your total LOC is. Whats in the background that might be holding your scores down? Any baddies?





Homeowner since Sept 2020. My posts are JMHO. My siggy is not to brag. Just sharing my experiences after BK from learning here from rebuild to recovery from the @ 540's.
Message 3 of 9
AyaMai
Valued Member

Re: Auto Loan/Fico Score


@FireMedic1 wrote:

Whats your scores now? If your util is 1%. Doesnt matter what your total LOC is. Whats in the background that might be holding your scores down? Any baddies?


My score dropped from 736 to 680 now back 687 due to a sudden collection report from collection agecny popped on my credit report in March 2022 from an old default credit Capital One card "Original Creditor" $1300 balance which will drop off in September 2023. I have a 30 days late payment of another Capital One Credit Card "Still Have" which will drop next month. 

 

American Express denied me for another card due to one of the reason "Proportion of loan balances to loan amount is too high"  2 credit cards and 3 charge cards were issued to me by them before credit score got hit and the balance of auto loan was higher.  I put 30% down payment of the car original price to have a lower monthly car payment. If lowering the balance will have a significant score increase then I will do extra payments but if not, then I have no interest in doing so.  Monthy payment is $319.84            No balance on any credit cards, utlization of any card 0% - 1%   I pay my charges the next day or before the closing date of my statement.

 

Balance on Apr 29, 2022    $18,943                                                   7% of this account has been paid 
Original loan amount          $20,417
Message 4 of 9
expatCanuck
Super Contributor

Re: Auto Loan/Fico Score

The derogs will work against immediate significant benefit you'd otherwise get from lowering the loan balance.

 

I wouldn't waste hard pulls applying for anything until you see where your scores are when the 30D late drops.


2022 Goal: save 3 months' net income

Starting FICO8: 666 (give or take)  [ Last INQ 15-Mar-2022 ]
EQ8145 INQ (2 CC 2 mort, car)7y0m
EX7986 INQ (4 CC, 2 mort)6y11m
TU8272 INQ (2 mort)6y5m
4/243/12AoYA 2m | AoOA 23y4m< 1%
Message 5 of 9
SouthJamaica
Mega Contributor

Re: Auto Loan/Fico Score


@AyaMai wrote:

@FireMedic1 wrote:

Whats your scores now? If your util is 1%. Doesnt matter what your total LOC is. Whats in the background that might be holding your scores down? Any baddies?


My score dropped from 736 to 680 now back 687 due to a sudden collection report from collection agecny popped on my credit report in March 2022 from an old default credit Capital One card "Original Creditor" $1300 balance which will drop off in September 2023. I have a 30 days late payment of another Capital One Credit Card "Still Have" which will drop next month. 

 

American Express denied me for another card due to one of the reason "Proportion of loan balances to loan amount is too high"  2 credit cards and 3 charge cards were issued to me by them before credit score got hit and the balance of auto loan was higher.  I put 30% down payment of the car original price to have a lower monthly car payment. If lowering the balance will have a significant score increase then I will do extra payments but if not, then I have no interest in doing so.  Monthy payment is $319.84            No balance on any credit cards, utlization of any card 0% - 1%   I pay my charges the next day or before the closing date of my statement.

 

Balance on Apr 29, 2022    $18,943                                                   7% of this account has been paid 
Original loan amount          $20,417

Again....  in order to tell you what effect it would have on your score to lower the auto loan balance, I would need to know (a) what other loans you have, if any, and (b) by how much you would lower the loan.  If it's your only open loan, you would receive a significant scoring benefit only when you pay the balance down to below $2040.  If it's not your only open installment loan, then I would need to know the loan amounts and the current balances of the others.


Total revolving limits 689000 (587000 reporting) FICO 8: EQ 718 TU 721 EX 698

Message 6 of 9
AyaMai
Valued Member

Re: Auto Loan/Fico Score


@SouthJamaica wrote:

@AyaMai wrote:

@FireMedic1 wrote:

Whats your scores now? If your util is 1%. Doesnt matter what your total LOC is. Whats in the background that might be holding your scores down? Any baddies?


My score dropped from 736 to 680 now back 687 due to a sudden collection report from collection agecny popped on my credit report in March 2022 from an old default credit Capital One card "Original Creditor" $1300 balance which will drop off in September 2023. I have a 30 days late payment of another Capital One Credit Card "Still Have" which will drop next month. 

 

American Express denied me for another card due to one of the reason "Proportion of loan balances to loan amount is too high"  2 credit cards and 3 charge cards were issued to me by them before credit score got hit and the balance of auto loan was higher.  I put 30% down payment of the car original price to have a lower monthly car payment. If lowering the balance will have a significant score increase then I will do extra payments but if not, then I have no interest in doing so.  Monthy payment is $319.84            No balance on any credit cards, utlization of any card 0% - 1%   I pay my charges the next day or before the closing date of my statement.

 

Balance on Apr 29, 2022    $18,943                                                   7% of this account has been paid 
Original loan amount          $20,417

Again....  in order to tell you what effect it would have on your score to lower the auto loan balance, I would need to know (a) what other loans you have, if any, and (b) by how much you would lower the loan.  If it's your only open loan, you would receive a significant scoring benefit only when you pay the balance down to below $2040.  If it's not your only open installment loan, then I would need to know the loan amounts and the current balances of the others.

 

 


$18,943  is my only open installment loan I have at the moment, no credit balance on any of the credit cards, no mortgage, can you please explain why the number $2040, that I would receive a significant scoring benefit. I only got back to applying for credit in October 2020 after having one credit card with $200 CL for 10 years and I paid everything in cash, now I use charge and credit cards for rewards such as cash back or points for any kind of purchases and expenses in my daily life except for rent at the current moment. 

Message 7 of 9
SouthJamaica
Mega Contributor

Re: Auto Loan/Fico Score


@AyaMai wrote:

@SouthJamaica wrote:

@AyaMai wrote:

@FireMedic1 wrote:

Whats your scores now? If your util is 1%. Doesnt matter what your total LOC is. Whats in the background that might be holding your scores down? Any baddies?


My score dropped from 736 to 680 now back 687 due to a sudden collection report from collection agecny popped on my credit report in March 2022 from an old default credit Capital One card "Original Creditor" $1300 balance which will drop off in September 2023. I have a 30 days late payment of another Capital One Credit Card "Still Have" which will drop next month. 

 

American Express denied me for another card due to one of the reason "Proportion of loan balances to loan amount is too high"  2 credit cards and 3 charge cards were issued to me by them before credit score got hit and the balance of auto loan was higher.  I put 30% down payment of the car original price to have a lower monthly car payment. If lowering the balance will have a significant score increase then I will do extra payments but if not, then I have no interest in doing so.  Monthy payment is $319.84            No balance on any credit cards, utlization of any card 0% - 1%   I pay my charges the next day or before the closing date of my statement.

 

Balance on Apr 29, 2022    $18,943                                                   7% of this account has been paid 
Original loan amount          $20,417

Again....  in order to tell you what effect it would have on your score to lower the auto loan balance, I would need to know (a) what other loans you have, if any, and (b) by how much you would lower the loan.  If it's your only open loan, you would receive a significant scoring benefit only when you pay the balance down to below $2040.  If it's not your only open installment loan, then I would need to know the loan amounts and the current balances of the others.

 

 


$18,943  is my only open installment loan I have at the moment, no credit balance on any of the credit cards, no mortgage, can you please explain why the number $2040, that I would receive a significant scoring benefit. I only got back to applying for credit in October 2020 after having one credit card with $200 CL for 10 years and I paid everything in cash, now I use charge and credit cards for rewards such as cash back or points for any kind of purchases and expenses in my daily life except for rent at the current moment. 


When you get the aggregate installment loan utilization percentage below 10% you will probably get a significant score boost in FICO 8's and 9's.  The negative reason code you're getting about percentage of loan balances will go away too.  Since you only have one $20,400 loan, you would need to get the balance below $2040 to get that boost.   There might be slight increases along the way down, but nobody has been able to pin that down.


Total revolving limits 689000 (587000 reporting) FICO 8: EQ 718 TU 721 EX 698

Message 8 of 9
GatorGuy
Established Contributor

Re: Auto Loan/Fico Score

In addition to the above advice, if you are paying off every credit card so they report zero every month you losing a few points off your credit score. It's called the all zero penalty. Basically looks as though you aren't using you're credit cards. For maximizing your scores it is ideal to have one card report a small balance, $20 or so. Let the $20 report on your statement but pay before the due date so you don't pay interest. You should gain a few points doing this. It is referred to as the AZEO method.

Message 9 of 9
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