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Debt to Income Ratios

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Debt to Income Ratios

I recently paid off a car (which is one of 2 auto loans on my report). I know when your car loan falls off your report, your score generally goes down a bit. But what happens when you have multiple auto loans and just one of them falls off? Shouldn't my score go up since I still have a good mixture of account types which would include an auto loan, while bringing by DTI down?

Capital One Venture One: $4,950 | Delta SkyMiles Gold AMEX: $1,000

Current FICO 8: EQ 670 ✦ TU 692 ✦ EXP 685

2020 FICO CS Goal: 700+
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Re: Debt to Income Ratios

My credit report didn't update yet hence why I'm asking what generally happens in these situations. But I'll know soon enough regardless.

Capital One Venture One: $4,950 | Delta SkyMiles Gold AMEX: $1,000

Current FICO 8: EQ 670 ✦ TU 692 ✦ EXP 685

2020 FICO CS Goal: 700+
Message 2 of 6
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Contributor

Re: Debt to Income Ratios

Its unlikely that your score will go up because the auto loan was closed, because you're likely losing the bonus points you get having an installment loan at a very small % owed, unless your other auto loan is at very low utilization as well.

Fico8 1/20:
Fico8 8/20:
AU:
Message 3 of 6
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Established Contributor

Re: Debt to Income Ratios

Depends on what level each loan is at. From my understanding, there is a bonus for aggregate loan utilization being at certain levels. So if you had one at $1k/40k and the other at $39k/40k your total level would be 50%. Once you pay off the one, you're back to 97.5% which would drop points.

If they are both below 9%, you're golden and should only see points go up.
as of 10/13/20
Current Cards:
Message 4 of 6
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Community Leader
Super Contributor

Re: Debt to Income Ratios

DTI isn't used in scoring, only to see if you can afford credit you applied for.







Message 5 of 6
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Super Contributor

Re: Debt to Income Ratios


@thecreditman wrote:

I recently paid off a car (which is one of 2 auto loans on my report). I know when your car loan falls off your report, your score generally goes down a bit. But what happens when you have multiple auto loans and just one of them falls off? Shouldn't my score go up since I still have a good mixture of account types which would include an auto loan, while bringing by DTI down?


Keep in mind that closing a loan doesn't cause it to fall off of your report.  Any closed account will typically remain present on your CR for ~10 years following closure.

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