I had 6 small installment loans, all with low utilization. This month I've closed 5 of 6.
I'm wondering how this will affect my scores, if at all.
Positively, because I'm reducing my number of accounts with balance?
Negatively, because I'm decreasing the percentage of open accounts which are installment loans rather than revolving accounts?
Or not at all, because (a) neither of the above matters, or (b) each of the above cancels the other out?
@Anonymous wrote:
@SouthJamaica wrote:I had 6 small installment loans, all with low utilization. This month I've closed 5 of 6.
I'm wondering how this will affect my scores, if at all.
Positively, because I'm reducing my number of accounts with balance?
Negatively, because I'm decreasing the percentage of open accounts which are installment loans rather than revolving accounts?
Or not at all, because (a) neither of the above matters, or (b) each of the above cancels the other out?
@SouthJamaica Very interesting question and test. I definitely think the older versions will respond positively due to the decreased number of accounts with a balance, maybe even A little on 8.
as for the revolver:loan ratio increasing, I don't know if that includes closed accounts or just open. That's a question I'd like an answer to. what will be your before and after ratio?
For open accounts the ratios of installment loans to total accounts would be: before 6/37 (16.2%) after 1/37 32 (2.7% 3.1%)
The ratios of open installment loans to total of all open and closed accounts would be: 6/71 (8.5%) before, 1/71 after (1.4%)
Update 11/23/20 10:44 pm:@Anonymous I just corrected the open accounts "after" figures
@Anonymous wrote:What was your before/after aggregate installment loan utilization?
What was your before/after #/% of accounts with a balance?
Everything was 8% or less, which will also be the case for the surviving loan. Which is why I didn't consider utilization to be a factor.
Accounts with balance: before 27, after yet to be determined but probably in the neighborhood of 21.
@Thomas_Thumb wrote:The change in # of accounts with a balance is significant. That should be a positive.
However, if your remaining open loan is quite young (say under 6 months age) and one of the recently closed loans was significantly older (say over 2 years age) that could have a negative impact. One of the Fico scoring factors is AAoA/AoOA of installment loans specific to open accounts only.
The ages are almost exactly the ones you threw out as examples.
One of the closed loans was a little over 2 years of age.
The remaining loan is 6 months of age.
@Anonymous wrote:
@Thomas_Thumb wrote:The change in # of accounts with a balance is significant. That should be a positive.
However, if your remaining open loan is quite young (say under 6 months age) and one of the recently closed loans was significantly older (say over 2 years age) that could have a negative impact. One of the Fico scoring factors is AAoA/AoOA of installment loans specific to open accounts only.
He might be able to isolate that Scoring Factor because it doesn't appear to be at EQ8, just TU8 and EX8. I didn't check the mortgage scores.
EX is the only one I can monitor on a daily basis, and daily monitoring is my only way of ever isolating any particular event.