Boom! 21pts Drop

[tjmolly]

God I so love FICO scoring where you get screwed royally for paying off a "consumer loan" that you already get dinged on your score for.  So I just payed off a consumer loan, which gives me more cash flow and a better financial standing and FICO-Experian reports a 21pt drop. So now I'm confused. If you get a consumer/personal loan they screw you and then when you pay it off, they screw you again.  Thanks again MyFICO, you are the best!!!!

[iheartwings]

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@tjmolly wrote:

God I so love FICO scoring where you get screwed royally for paying off a "consumer loan" that you already get dinged on your score for.  So I just payed off a consumer loan, which gives me more cash flow and a better financial standing and FICO-Experian reports a 21pt drop. So now I'm confused. If you get a consumer/personal loan they screw you and then when you pay it off, they screw you again.  Thanks again MyFICO, you are the best!!!!

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Yes, it's fustrating. I assume you have no other installment loans. In this instance, there are two things that happened:

1) With no other installment loans reporting, you reduced your credit mix from revolving + loan, to just revolving alone. This can lower your score.

2) Your balance to loan ratio (the loan equivalent of utilization) went from being <10% (or whatever threshold) to 0%, which dropped your score.

You can get around both issues by trying the Share Secure Loan method described in this thread.

Or, you could be like me and wait. My scores recovered but took a few months after paying off my loan (I refinanced my student loans, and the bank they are through now has not reported them, so I get dinged for credit mix, too).

[Anonymous]

Employ the SSL technique and you'll get back your 21 points the moment it reports.

[tjmolly]

I'm going to do that.  I'm about to apply for a mortgage and thought it would help my DTI, which it did.  I have a car loan and small revolving CC at <10% Utilization.  Oh well, I'll still get the best rate anyway.  Oh and I love how Karma works with Equifax getting the royal screw over with a data breach. I hope they get sued into bankruptcy.  They have always been my worst score, the bastards!!!  Have a good weekend!

[credit_endurance]

Just had my personal loan report as PIF on my reports and took an 11 point ding on EXP 8 point ding on TU while EQ held steady all this while my SSL is reporting. Explain that ?...So not sure what to figure on this. Just waiting for the SSL to report at 8.9% optimum to hopefully gain back what was lost.

[Anonymous]

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@tjmolly wrote:

I'm going to do that.  I'm about to apply for a mortgage and thought it would help my DTI, which it did.  I have a car loan and small revolving CC at <10% Utilization.  Oh well, I'll still get the best rate anyway.  Oh and I love how Karma works with Equifax getting the royal screw over with a data breach. I hope they get sued into bankruptcy.  They have always been my worst score, the bastards!!!  Have a good weekend!

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You write "I'm going to do that."  I am pretty sure you mean that you are going to implement the Share Secure Loan Technique.

That technique only helps people, however, who have no open loans.  You'll see that mentioned in the thread that iHeartWings linked you to.  You have an open car loan.

You mention a 21 point drop.  Was that on your EX mortgage score?  Or your FICO 8 score?  Mortgage lenders do not use FICO 8.  If you got an "alert" showing the 21 point drop then it was a FICO 8 score (assuming you are using the myFICO Ultimate 3B product).

PS.  As far as your CC utilization goes, you should be keeping it at < 8.9%.  Keeping at just under 10% (e.g. 9.3%) will still give you a penalty.

[rprisco]

I'm about 6 months into a 6k 60 month loan as the loan gets about halfway done, I plan to do the secured loan route so that I have overlapping and continious seasoned loans reporting and hope to avoid that score drop, which I've experienced 3 times since 2008, and pading the number of total payments can't hurt either.

The true bennies in my case are not realized until 6k is paid down, luckily my credit union moves the due date also, so as I shovel extra money on it, the due date goes foward. I'm paid through October. Sux to have to carry debt to please the score... blame it on the matrix, lol.