FICO® SCORE 8 FACTORS Balance Relatively High

[LP007]

The remaining balance on your mortgage or non-mortgage installment loans is relatively high.

How is the $1,033 balance on a $10,000 installment loan relatively high? Right there in my  FICO® SCORE 8 FACTORS section. Big red down arrow. I don't get it.

Then they got the nerve to print this at the bottom of their explanation: 

Percentage of principal you have paid down on your open non-mortgage installment loans 90%

FICO High Achievers have paid down an average of 40% of the principal on their non-mortgage installment loans.

[Anonymous]

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@LP007 wrote:

The remaining balance on your mortgage or non-mortgage installment loans is relatively high.

How is the $1,033 balance on a $10,000 installment loan relatively high? Right there in my  FICO® SCORE 8 FACTORS section. Big red down arrow. I don't get it.

Then they got the nerve to print this at the bottom of their explanation: 

Percentage of principal you have paid down on your open non-mortgage installment loans 90%

FICO High Achievers have paid down an average of 40% of the principal on their non-mortgage installment loans.

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I think it always says that when the balance to loan percentage is greater than 9%, which means 10%+ (only integers are used after rounding).

You're at 10.33% actual, which rounds down to 10%. This is greater than 9%, so you see that reason.

I saw the same text as you, on a December 2018 report with an $84 balance (17%) on a $500 credit builder loan (aka share secured loan, SSL). It went away when the balance dropped to $42 or 8% of the original loan amount.

Others have reported similar on the forums.

[LP007]

Child, you rock!!!

[SouthJamaica]

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@LP007 wrote:

The remaining balance on your mortgage or non-mortgage installment loans is relatively high.

How is the $1,033 balance on a $10,000 installment loan relatively high? Right there in my  FICO® SCORE 8 FACTORS section. Big red down arrow. I don't get it.

Then they got the nerve to print this at the bottom of their explanation: 

Percentage of principal you have paid down on your open non-mortgage installment loans 90%

FICO High Achievers have paid down an average of 40% of the principal on their non-mortgage installment loans.

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It's ridiculous, but I kept getting that code until I got it down to 9%.

[LP007]

I just made a payment to get it under 9% even though an auto payment is scheduled for 10/28. I just want to make sure to get it in before my 11/7 FICO report refresh. 

[Anonymous]

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@LP007 wrote:

I just made a payment to get it under 9% even though an auto payment is scheduled for 10/28. I just want to make sure to get it in before my 11/7 FICO report refresh. 

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Anything below $950 will do it!

But if you pay it to $0 you'll lose points! Nice, right? It's well known on the forums that closing a loan causes a loss of points. I experienced it myself.

Welcome to myFICO Forums!

[LP007]

True dat. I had a CC and an installment loan at the same credit union and accidentally sent a large CC payment to the installment account. Kept wondering when my CC pay down was going to show up. Got a check in the mail for loan overpayment. DOH!!! After I get this one down under 9%, I'm going to see if they can re-cast the final amount over the next five years just to keep it hot. At my current rate, it'll be paid off in 8 mos.

[UpAndComing74]

Question...Does this include Student Loans in the calculation or only installment loans like auto ands the such?  My Student Loan is showing a Principle of $7000 and a Principle of $13000 so it makes it look like its almost 200% in the hole.

[Anonymous]

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@SouthJamaica wrote:

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It's ridiculous, but I kept getting that code until I got it down to 9%.

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How is that ridiculous?  A reason code means that it's impacting score at least 1 FICO point.  From your own experience you know that crossing that 9% threshold is good for (say) 15-20 points.  He's above 9%, so his score is being impacted at least 1 FICO point (probably much more) and hence the reason code. 

If you want to make the argument that full Fico points should be awarded at a threshold above 9% for installment loan utilization that's fine and well, but with the system as it currently sits I'm not understanding what's ridiculous about the reason code provided to the OP.  It basically suggests that paying down his loan some more will result in a score increase, which is true.

[LP007]

It's a "No go" on the recast. Thus, instead of reducing my payments to $10/mo to keep the installment loan alive, I have to keep paying $100/mo. I made an early custom payment to get it to 9%, but the interest sneakily kept me $0.33 short ($900.33/$10,000). Will I still be above 9%?