Effect of closing low utilization installment loans

[Anonymous]

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@SouthJamaica wrote:

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@Anonymous wrote:

@SouthJamaica I noticed some loan points at 30 months. Maybe that is the first breakpoint. Maybe that’s why you didn’t lose anything, you did say it was over two years but it’s not yet 30 months, right?

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The question for me, if there is a question, is why I didn't gain points. I gained FICO 2 points when each of the other 2 younger loans were paid off.

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@SouthJamaica my opinion would be because 1. you didn't cross a number of accounts with a balance threshold or 2. because you did not cross another ratio threshold.

[SouthJamaica]

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@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?

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The bottom line in this exercise seems to be that dropping 5 of my 6 low utilization installment loans improved my EQ 5 score by around 20 points and my EX 2 score by around 10, and had  no effect one way or the other on my FICO 8's.

Most likely the reason for the gain was the reduction in number of accounts with balances.

[Anonymous]

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@SouthJamaica wrote:

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Most likely the reason for the gain was the reduction in number of accounts with balances.

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That's what I would go with as well.