Did Used Car Loan and New CC Drop my score this much?

[Anonymous]

I am sitting here speechless. I plan to refinance my mortgage now that it is making financial sense to do so and decided to check my scores after one bank pulled them and got funny. I was sitting around 780 fico. I told them I was around there, definitely north of 740 because I had checked a couple months ago and car loan paperwork had 782 fico on it. Okay. I looked at them today: EX 717, EQ 725, TU 738. Only one card reports 6% or under. Only baddies are 3 30 day later over 2.5 years ago. Everything is in good standing and paid on time and I have practiced AZEO for a couple of years now. Only new thing is the used car loan in Feb and one new card from Chase in March. AAOA is 7 years. The newest accounts besides the two newest are over 2 years of age coming May 9th and that is a Amex and citi. Did the credit pulls and obtaining these two accounts really drop my scores to sub 740 from over 780??? I won't qualify for the best rates now and don't know what to do!

[dragontears]

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@Anonymous wrote:

I am sitting here speechless. I plan to refinance my mortgage now that it is making financial sense to do so and decided to check my scores after one bank pulled them and got funny. I was sitting around 780 fico. I told them I was around there, definitely north of 740 because I had checked a couple months ago and car loan paperwork had 782 fico on it. Okay. I looked at them today: EX 717, EQ 725, TU 738. Only one card reports 6% or under. Only baddies are 3 30 day later over 2.5 years ago. Everything is in good standing and paid on time and I have practiced AZEO for a couple of years now. Only new thing is the used car loan in Feb and one new card from Chase in March. AAOA is 7 years. The newest accounts besides the two newest are over 2 years of age coming May 9th and that is a Amex and citi. Did the credit pulls and obtaining these two accounts really drop my scores to sub 740 from over 780??? I won't qualify for the best rates now and don't know what to do!

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Yes, unfortunately mortgage scores SEVERELY penalizes you for new accounts and you went from age of youngest account (AoYA) of ~2 years to an AoYA of ~2 months. 

This is the underlying reason it is recommended to not open new accounts 12 months prior to a mortgage 

ETA: also mortgage scores are different than the ones typically used for cars or cards so unless your car lender pulls a older FICO version your mortgage scores may not have been that high before your new accounts. 

[Anonymous]

That’s right the new credit card changed your scorecard and dropped you from 10 to 30 points plus you got your hp, plus you’ve got your AAOA hit potentially.

Then the loan cost you a hp and affected your ages as well I’m sure. Not to mention high aggregate installment utilization, which I’m sure will be in your negative reason codes, if you have enough.

And then with those 30 day lates I don’t even know if you’re on a clean card or a dirty card actually. Can you tell us what your negative reason codes are? Seems like you are on a clean card with that type of hit. 

[SouthJamaica]

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@Anonymous wrote:

I am sitting here speechless. I plan to refinance my mortgage now that it is making financial sense to do so and decided to check my scores after one bank pulled them and got funny. I was sitting around 780 fico. I told them I was around there, definitely north of 740 because I had checked a couple months ago and car loan paperwork had 782 fico on it. Okay. I looked at them today: EX 717, EQ 725, TU 738. Only one card reports 6% or under. Only baddies are 3 30 day later over 2.5 years ago. Everything is in good standing and paid on time and I have practiced AZEO for a couple of years now. Only new thing is the used car loan in Feb and one new card from Chase in March. AAOA is 7 years. The newest accounts besides the two newest are over 2 years of age coming May 9th and that is a Amex and citi. Did the credit pulls and obtaining these two accounts really drop my scores to sub 740 from over 780??? I won't qualify for the best rates now and don't know what to do!

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1. You've got to focus exclusively on your mortgage scores, EX FICO 2, TU FICO 4, and EQ FICO 5.

2. You should work hard on getting the negative items removed. My recommendation would be to send verification letters to all 3 bureaus for each item.

3. Continue with AZEO but make sure the card reporting a balance is a bank card, and that it's either (a) not a Chase card, or (b) if it is a Chase card, never gets down to zero.

4. You might get a few points in 1 or 2 of your mortgage scores by paying the car loan down to 9% of the original loan amount.

5. And of course no new credit applications, and no CLI applications or new credit union applications which  might involve a hard pull.

I'm surprised you would have gotten a new credit card and car loan when you're in the runup for a mortgage. That is one of the worst things you can do in terms of mortgage scores.

[Anonymous]

I have a mortgage, I am going to refinance and had I know everything was going to tank and rates drop, I would have waited on the car and the CC. How was I to know in a short while all of this was going to go down and make it financially worthwhile to refinance the house?

The three 30 days are on the same NFCU Platnium. They won't remove them. I tried for two years and if I dispute, Navy is known for clearing all the history. Since the last one is over two years old, I assumed it should not hurt much and my scores prior to the car and cc where much higher. 

AZEO card is Citi and I have used either it or AMEX in that roll since I got on the forums. The car loan is low. I got it only to have the history added to the file and I can pay it off, but 8% is $752 and I still will have it as a new account. I don't want to say I screwed myself here, but I am feeling it over a market crash I didn't know was coming. Any help on getting over 740 here? I don't want to pay off the car basically if I don't have to as I want that to go into house repairs I have a contractor lined up to do. If it will put me over the 740 I will do it immediately though. 

[SouthJamaica]

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@Anonymous wrote:

I have a mortgage, I am going to refinance and had I know everything was going to tank and rates drop, I would have waited on the car and the CC. How was I to know in a short while all of this was going to go down and make it financially worthwhile to refinance the house?

We frequently mention the fact in this forum that mortgage scores are especially sensitive to new inquiries and new accounts. My mortgage scores are usually around 50 points lower than my FICO 8's and 9's because I'm chronically applying for new things

The three 30 days are on the same NFCU Platnium. They won't remove them. I tried for two years and if I dispute, Navy is known for clearing all the history. Since the last one is over two years old, I assumed it should not hurt much and my scores prior to the car and cc where much higher. 

OK but I would send verification letters to the bureaus, just in case.  Sometimes the lender doesn't bother responding.

AZEO card is Citi and I have used either it or AMEX in that roll since I got on the forums.

Good

The car loan is low. I got it only to have the history added to the file and I can pay it off, but 8% is $752 and I still will have it as a new account.

Since you already have another installment loan -- your existing mortgage -- it doesn't matter one way or the other what you do with the car loan.

I don't want to say I screwed myself here, but I am feeling it over a market crash I didn't know was coming. Any help on getting over 740 here? I don't want to pay off the car

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@Anonymous wrote:

I have a mortgage, I am going to refinance and had I know everything was going to tank and rates drop, I would have waited on the car and the CC. How was I to know in a short while all of this was going to go down and make it financially worthwhile to refinance the house?

The three 30 days are on the same NFCU Platnium. They won't remove them. I tried for two years and if I dispute, Navy is known for clearing all the history. Since the last one is over two years old, I assumed it should not hurt much and my scores prior to the car and cc where much higher. 

AZEO card is Citi and I have used either it or AMEX in that roll since I got on the forums. The car loan is low. I got it only to have the history added to the file and I can pay it off, but 8% is $752 and I still will have it as a new account. I don't want to say I screwed myself here, but I am feeling it over a market crash I didn't know was coming. Any help on getting over 740 here? I don't want to pay off the car basically if I don't have to as I want that to go into house repairs I have a contractor lined up to do. If it will put me over the 740 I will do it immediately though. 

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Like I said, it doesn't matter what you do with the car loan.

basically if I don't have to as I want that to go into house repairs I have a contractor lined up to do. If it will put me over the 740 I will do it immediately though. 

In view of the fact that it's not your only installment loan, and is no doubt eclipsed by a much larger mortgage, I don't know what you could possibly do with the car loan that would net you some points, so you might as well not do anything special with it. Sorry.

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[Anonymous]

@Anonymous if you wouldn't mind, if you could post your negative reason codes that would be very helpful. It seems you may still be on a clean scorecard with 3 30 day lates and that would be very interesting DP. 

If you have new accounts listed as a negative reason code, then you're still in a clean card. And from the hit you took it seems like a scorecard change from no new accounts to new accounts scorecard.

Had you been in a dirty card the only hits would've been the HPs and aging which would've been a lot less and there wouldn't have been a scorecard reassignment. 

So if you would check, it would be a service to the community's knowledge base. Thank you.

[Anonymous]

Poor payment history (3 30 day lates 2.5 years ago on last on) 

Seeking credit

Poor payment history (30 days)

Since those where there, I must have been dropped into a lower bucket opening the car loan and CC. :-[

[Anonymous]

@Anonymousthank you for responding.

Car loan is not what did it, it could not have; it’s not a segmentation factor. The credit card could, but ONLY if you’re on a clean card....It could be the fourth code and we’re just not seeing it.

If those inquiries weren’t there we would see it maybe. How many inquiries do you have?

Actually it doesn’t matter as long as they’re younger than a year even one will cause the code but if you have a lesser number, it’ll take away less points and therefore go down on the list in precedence as they are listed in order of precedence.

Just really weird because with that kind of drop it seems like a scorecard change, but that can only happen like this if you’re on a clean card. The serious derogatory indicator is not there thankfully.

You have poor payment history listed twice? Is that normal? The one good thing about those 30 day lates is you get points back at like 6 and 12 months and 24 months then the penalty is much less severe until it finally drops. On the flip anything worse than 60 you get a little back, but it hurts bad the whole time. At least at two years you recover a significant portion of the penalty on minor derogatories.

Is that second code indicating a fourth 30 day late? And if so how recent is it?

Edit: by the way, you didn't have anything else going on, any changes in utilization or other changes, no accounts that dropped, nothing else that could've interfered?

[Anonymous]

No other lates. Only those three and only because I was in the middle of a horrible divorce and things happened while I was mentally fried in that stage. 

Utilization is always around 1%, only at 6% this time because the statement cut a day earlier than normal. I pay everything in full every month to not carry balances after the 1% reports in. Only changes is increase in limited on existing cards and the new one. HE'S are at 7 on Equifax, but 5 of them are the car loan being shopped around by the dealer so should count as 1. The other two burreus have less than 5 since they don't get unlocked often. 1 new CC, 1 bank for mortgage refi, 1 on NFCU CC increase on card over 5 years old. 

Until this new stuff between last November and end of Feb., all HE'S were falling off over two years of age. 

I see no other codes and the two on payments I think is it giving the only reasons it can find.