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Doubts about "Closing an Account doesn't effect aging matrix in FICO"

DRSECU77
Established Member

Doubts about "Closing an Account doesn't effect aging matrix in FICO"

Had 7 month old auto loan, 17yr & 21yr old Mortgages.  Paid off 17yr old Mortgage and score dropped 9 points (FICO 8).

 

If FICO considers closed accounts for aging purposes then what is reason for the drop?  Only one term loan needed for "credit mix" scoring matrix which I still have.  Utilization on term loans is said to not be considered, in any it case would have changed my utilization (current debt to orginal) from 45% to 42%.  Just a curiosity question, but my FICO 2/4/5 was barely over best rate threshold before (752) so I it looks like I can't pay off my primary home mortgage if I need another mortgage.

Message 1 of 22
21 REPLIES 21
CreditSweeper
Established Contributor

Re: Doubts about "Closing an Account doesn't effect aging matrix in FICO"

Aggregate loan to balance % increase?

Personal Credit -
AMEX: Platinum, Gold, Green, Blue Cash Preferred
PNC: Cash Rewards, Points
BOA: Cash Rewards
NFCU: Flagship Rewards, Cash Rewards, CLOC
PSECU: Founders
BB&T: Spectrum Cash Rewards
CapOne: Quicksilver
Discover: IT Chrome, IT
Synchrony: PayPal 2%, PayPal Credit
Barclays: Uber
PenFed: Power Cash Rewards, Platinum Rewards
Alliant: Visa Signature
Goldman Sachs: Apple Card
BBVA: Clear Points
FNBO: Rewards
Store Cards: Target, Macy’s



Business Credit-
AMEX: Delta Gold, Amazon Prime, Simply Cash Plus
PNC: Visa Business
Synchrony: Lowes
Message 2 of 22
BrutalBodyShots
Super Contributor

Re: Doubts about "Closing an Account doesn't effect aging matrix in FICO"

OP, was the loan you paid off close to being paid off, or did it have a significant balance?  Typically when someone has multiple open loans and they pay one off overall loan utilization increases.  I would look at the before/after aggregate loan utilization, as an increase there may have caused a score drop.  Credit mix remains unchanged, as do age of accounts factors, so neither of those would have adversely impacted your score.

Message 3 of 22
Birdman7
Super Contributor

Re: Doubts about "Closing an Account doesn't effect aging matrix in FICO"


@DRSECU77 wrote:

Had 7 month old auto loan, 17yr & 21yr old Mortgages.  Paid off 17yr old Mortgage and score dropped 9 points (FICO 8).

 

If FICO considers closed accounts for aging purposes then what is reason for the drop?  Only one term loan needed for "credit mix" scoring matrix which I still have.  Utilization on term loans is said to not be considered, in any it case would have changed my utilization (current debt to orginal) from 45% to 42%.  Just a curiosity question, but my FICO 2/4/5 was barely over best rate threshold before (752) so I it looks like I can't pay off my primary home mortgage if I need another mortgage.


@DRSECU77 welcome. Your score change did not derive from the length of history category, nor from the credit mix category, but from the amounts owed category.

 

I don't know who told you that loan utilization is not tracked, but the remaining B/L is considered. One bureau considers different types of loans grouped and in the aggregate, and the other 2 bureaus appear to consider just aggregate loan utilization. 

either way you better believe it is tracked, and my guess is your aggregate loan utilization went up when you paid that off, and that accounts for the loss of points from the amounts owed category, primarily although balance thresholds could've played a small part. 

-Our Community’s updated scoring wisdom: Link to Scoring Primer.
-For Negative Reason Codes see: CassieCard’s Score Factors thread.
-ccquest’s workbook to calculate metrics for you: Link to Workbook.

Correct Ag.Util. under 5% all times. (Oldest/avg varies. Estimates above.)
Real world mortgage maxes are: EQ5-818, TU4-839, EX2-844.

RIP:

(Everything said is JMHO and is not endorsed by FICO or MF. I have no affiliation with either, just a grateful member.)
Message 4 of 22
Birdman7
Super Contributor

Re: Doubts about "Closing an Account doesn't effect aging matrix in FICO"

@DRSECU77 there is a metric for oldest open installment loan though I think, so if you close your oldest that could possibly cost some points, but it would not be from the credit mix category, it would be from length of history category. Plus changes from amounts owed. 

I would have to go look that may only be at one bureau. 

-Our Community’s updated scoring wisdom: Link to Scoring Primer.
-For Negative Reason Codes see: CassieCard’s Score Factors thread.
-ccquest’s workbook to calculate metrics for you: Link to Workbook.

Correct Ag.Util. under 5% all times. (Oldest/avg varies. Estimates above.)
Real world mortgage maxes are: EQ5-818, TU4-839, EX2-844.

RIP:

(Everything said is JMHO and is not endorsed by FICO or MF. I have no affiliation with either, just a grateful member.)
Message 5 of 22
DRSECU77
Established Member

Re: Doubts about "Closing an Account doesn't effect aging matrix in FICO"

Thanks for all advise, will read through links.  The total debt as a % did in fact fall, here are the exact numbers:

 

October:

Mortgage 1 $44,581 ($115,000 max) Age 21yr

Mortgage 2 $48,807 ($90,400 max) Age 17yr

Auto Loan $11,729 ($12990 max) Age 7months

Total 48.16%

 

November

Mortgage 1 $43,994 ($115,000 max)

Mortgage 2 Paid off

Auto Loan $11,470 ($12990 max)

Total 43.33%

 

Oldest account is still open.  B/L% for all mortgages dropped, B/L% for all term loans in general dropped.  There don't appear to be other factors, I have two other credit cards, one 0%, the other dropped from 3% to 2%.

 

Could it be the scoring matrix is not weighted, so I went from 39%, 54%, 90% (61% non-weighted) to 38%, 88% (63% non-weighted) instead?

Message 6 of 22
BrutalBodyShots
Super Contributor

Re: Doubts about "Closing an Account doesn't effect aging matrix in FICO"

I'd look to a different category completely that was responsible for the score drop, something like an old account falling off of your CR.  IMO based on the aggregate utilization numbers and other factors surrounding your loans the closure of the one loan shouldn't have impacted anything scoring wise.

Message 7 of 22
Birdman7
Super Contributor

Re: Doubts about "Closing an Account doesn't effect aging matrix in FICO"

@DRSECU77 which bureaus and versions dropped?


-Our Community’s updated scoring wisdom: Link to Scoring Primer.
-For Negative Reason Codes see: CassieCard’s Score Factors thread.
-ccquest’s workbook to calculate metrics for you: Link to Workbook.

Correct Ag.Util. under 5% all times. (Oldest/avg varies. Estimates above.)
Real world mortgage maxes are: EQ5-818, TU4-839, EX2-844.

RIP:

(Everything said is JMHO and is not endorsed by FICO or MF. I have no affiliation with either, just a grateful member.)
Message 8 of 22
Birdman7
Super Contributor

Re: Doubts about "Closing an Account doesn't effect aging matrix in FICO"

@DRSECU77 OK aggregate loan utilization went from 48% to 43% so that's not it. Mortgage loan utilization went from 45% of 38% so that's not it.

 

OK let me ask you a couple profile questions: any derogatories on file? what's the age of your oldest account? how many accounts do you have? What's the age of your youngest revolver and your youngest account?

-Our Community’s updated scoring wisdom: Link to Scoring Primer.
-For Negative Reason Codes see: CassieCard’s Score Factors thread.
-ccquest’s workbook to calculate metrics for you: Link to Workbook.

Correct Ag.Util. under 5% all times. (Oldest/avg varies. Estimates above.)
Real world mortgage maxes are: EQ5-818, TU4-839, EX2-844.

RIP:

(Everything said is JMHO and is not endorsed by FICO or MF. I have no affiliation with either, just a grateful member.)
Message 9 of 22
DRSECU77
Established Member

Re: Doubts about "Closing an Account doesn't effect aging matrix in FICO"

Appreciate the help help Birdman. 

 

Experian FICO 8 (784) is what I posted (dropped 9 points), I have a couple different sources of Experian Fico 8 and they are a point or two off (different pull dates).

 

Just realized my Citi account has access to Equifax Fico Bankcard 8, that increased from 792 to 833 with the move.  My actual report data across Experian and Equifax very similar (dates on a closed account are off).  My Transunion report didn't have either mortgage.  Earlier this year my FICO 8 Auto was Transunion 584 Equifax 674 Experian 781.  FICO Mortgage report was 749-758 recently.

 

Mortgage:

Mortgage $43,994 ($115,000 max) 21yrs old

Closed 17yr mortgage

 

Other Installment:

Auto Loan $11,470 ($12990 max) 7 months old

Closed 2007-2011 small line of credit never used

 

Credit:

CC 1 $128 of $5000 (7 months old)

CC2 $0 of $500 (4 years old) never used

Closed CC3 2011-2017, perfect payment history but note of "closed by credit granter".

Closed HELOC 2004-2018, multiple lates 2015

 

Had lates from 2015 on a closed loan.  I bascially didn't finance anything for 17 years and just got the Credit card and Auto loan this year to improve scoring.  My wife has 13 months credit history (a single card) and just passed me on FICO 8 Smiley Happy  Biggest point of question is I am in fear of paying off the 21yr old mortgage now, going to see if bank will let me pay it down to 10k and re-armoritize it.  

 

Message 10 of 22
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