@Caught750 wrote:
@Anonymous wrote:
@Caught750 wrote:Well of course the file looks, and is, better lol! I just preferred the old no penalties card!
In reality it's as much the new mortgage reporting and new installment loans, all with 99% balances.
@Caught750 No, not really. Score 8 doesn't really penalize you for having an installment loan, it just rewards you heavily when you have the aggregate 9% or under and then it claws it back when you pay off the loan(s).
My scores tanked as two installments (paid below 50%) were reported paid off and new ones at 100% were opened. No other changes reported at the time. Just those. To the tune of 25 points or so.
Lost another 10 or so when the mortgage reported.
1. Fico looks at aggregate balance to loan ratio. You went from under 50% to nominally 100%. That hurt your score. There is a threshold above 50% (somewhere in the 65% to 69% based on data from a few years back). The belief that only one threshold exists - at 9% is incorrect.
2. Fico looks at age of OPEN loans as a scoring attribute (oldest open and average age of open). Dropping to zero hurt your score (code 36 - not in below paste).
3. Fico 8 looks for an active/open installment loan on file which might tie in to #2 above.
4. Fico 8 looks at age of installment loans (open + closed) as a metric with age of oldest on file being important. Your age of oldest did not change. Although closed, it is still on file (code 25).
5. Fico has specific reason statements that state mortgage or non mortgage.
The 25 point loss was due to #2 and #3 when the open loans closed (codes 36 and 55). The additional 10 point loss was potentially due to the mortgage showing up at near 100% B/L utilization (code 53).
The below paste is an excerpt from an Experian document: "Fico score Factors Guide - Experian" dated 2014. I saved a copy of the guide years ago but, can't find a link.
