I fought long and hard and worked diligently to run my three scores into the 800 club, using every technique I found on these boards. It worked as you can see. Now the question is - how do I stay there?
The Facts: My credit file consists of 5 open accounts - three Amex cards (Amex Everyday, $10,000 CL Bal $128, Delta Gold, CL $21,000 Bal $1,500 and USAA CL $4,500 Bal $0), one Chase (Chase Amazon CL $4,500 Bal $150) and my mortgage (Orig Bal $100,000 current Bal $47,300). Everything else is paid satis and closed. I pay all 4 credit cards in full every Friday so there is never any chance of a late payment and this pretty much does the AZEO strategy. My AAOA is short - 2 years. I have 1 inq on my CRA, and that is a year old. I am terrified of apping for any credit because of the points I will lose because of it.
The Question: The last time I paid off my mortgage (different property which I now own free and clear) I lost 60 points on all three bureaus. I plan to pay off this mortgage in May 2020. Doing this reckless thing will drop me out of the 800 club, possibly permenantly. Are there any suggestions on how I can stay in the 800 club?
@Anonymous wrote:I fought long and hard and worked diligently to run my three scores into the 800 club, using every technique I found on these boards. It worked as you can see. Now the question is - how do I stay there?
The Facts: My credit file consists of 5 open accounts - three Amex cards (Amex Everyday, $10,000 CL Bal $128, Delta Gold, CL $21,000 Bal $1,500 and USAA CL $4,500 Bal $0), one Chase (Chase Amazon CL $4,500 Bal $150) and my mortgage (Orig Bal $100,000 current Bal $47,300). Everything else is paid satis and closed. I pay all 4 credit cards in full every Friday so there is never any chance of a late payment and this pretty much does the AZEO strategy. My AAOA is short - 2 years. I have 1 inq on my CRA, and that is a year old. I am terrified of apping for any credit because of the points I will lose because of it.
The Question: The last time I paid off my mortgage (different property which I now own free and clear) I lost 60 points on all three bureaus. I plan to pay off this mortgage in May 2020. Doing this reckless thing will drop me out of the 800 club, possibly permenantly. Are there any suggestions on how I can stay in the 800 club?
Having one report a balance is the real AZEO. You stated you pay them off every Friday. So have 1 report <8.9%. Losing your only loan hurts some. Do you have any other loans at all?
How do you stay there?
Pay your bills on time, don't use your credit, and don't apply for more.
@Anonymous wrote:I fought long and hard and worked diligently to run my three scores into the 800 club, using every technique I found on these boards. It worked as you can see. Now the question is - how do I stay there?
The Facts: My credit file consists of 5 open accounts - three Amex cards (Amex Everyday, $10,000 CL Bal $128, Delta Gold, CL $21,000 Bal $1,500 and USAA CL $4,500 Bal $0), one Chase (Chase Amazon CL $4,500 Bal $150) and my mortgage (Orig Bal $100,000 current Bal $47,300). Everything else is paid satis and closed. I pay all 4 credit cards in full every Friday so there is never any chance of a late payment and this pretty much does the AZEO strategy. My AAOA is short - 2 years. I have 1 inq on my CRA, and that is a year old. I am terrified of apping for any credit because of the points I will lose because of it.
The Question: The last time I paid off my mortgage (different property which I now own free and clear) I lost 60 points on all three bureaus. I plan to pay off this mortgage in May 2020. Doing this reckless thing will drop me out of the 800 club, possibly permenantly. Are there any suggestions on how I can stay in the 800 club?
Don't worry about it. Pay off the mortgage and don't sweat it. You'll inch your way back into the 800's as your profile ages, doing just what you are doing now.
@FireMedic1 wrote:
@Anonymous wrote:I fought long and hard and worked diligently to run my three scores into the 800 club, using every technique I found on these boards. It worked as you can see. Now the question is - how do I stay there?
The Facts: My credit file consists of 5 open accounts - three Amex cards (Amex Everyday, $10,000 CL Bal $128, Delta Gold, CL $21,000 Bal $1,500 and USAA CL $4,500 Bal $0), one Chase (Chase Amazon CL $4,500 Bal $150) and my mortgage (Orig Bal $100,000 current Bal $47,300). Everything else is paid satis and closed. I pay all 4 credit cards in full every Friday so there is never any chance of a late payment and this pretty much does the AZEO strategy. My AAOA is short - 2 years. I have 1 inq on my CRA, and that is a year old. I am terrified of apping for any credit because of the points I will lose because of it.
The Question: The last time I paid off my mortgage (different property which I now own free and clear) I lost 60 points on all three bureaus. I plan to pay off this mortgage in May 2020. Doing this reckless thing will drop me out of the 800 club, possibly permenantly. Are there any suggestions on how I can stay in the 800 club?
Having one report a balance is the real AZEO. You stated you pay them off every Friday. So have 1 report <8.9%. Losing your only loan hurts some. Do you have any other loans at all?
I have no other loans and once I pay this one off I have no debt at all except for the week's credit card use.
You have already proved as your credit is by far beyond excellent, so you know how to get there, do what you have been doing, relax and enjoy the ride, no need to excess, by the way congrats on your scores
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Flyingifr Listen closely. Your B/L is 47% on your mortgage. You know what that means? That means you have NOT yet got the big score boost an installment loan provides. (Probably 20-30 points.) You CANNOT lose what you have not yet earned.
You have passed the 65-70% threshold, which is small comparatively, so you would lose some points, but maybe not even enough to knock you outta the 800 club! How do you like that? If so, it would only be at TU and EX and you would not be very far under 800. A little age would put you back above 800.
Now, you asked how to stay there. Simple answer is keep utilization low and don't open any new accounts.
Now, if on the other hand, you would like to increase your scores, there's also a simple way to do that. Pay the mortgage down to < 9%. You'll see a nice boost, 20-30 points probably.
BUT therein lies the source of your fear: if you gain those points, then when you pay off the mortgage, you will lose those points (plus the ones you got at the 6x% threshold, too)!
But if you simply pay the mortgage off, you'll never see the significant gain, so you will only see a minor loss.
Now, what if you want your cake and you wanna eat it too? That's possible here. Go read the thread on the SSLT (share secured loan technique). Basically, you go take out a small installment loan with the longest possible term and then pay it down to under 9% and then milk it.
Once you do that, you can payoff the mortgage without fear, as you'll have an optimized installment loan on your CR. When the mortgage is paid off, you'll see a point gain rather than a loss because your aggregate installment utilization will go from > 9% to < 9%! How do you like that?
Now, in order to do this, you're probably gonna have to take an HP somewhere (I'd suggest EQ, if possible). (Also remember, the point loss for an installment loan is buffered/delayed by 30 days.)
I have found installment loans do not reset AoYA (at least on a clean/thick/aged scorecard), so I don't think you have to worry about that loss (even if you did lose them, those points also come back in a year):
https://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/AoYA-penalty-Clean-aged-thick/td-p/57223...
So you will probably wear an HP at one CRA with its ding (which is recovered in 365 days) and you know it will also lower your AAoA slightly at all 3 CRAs, but as low as your AAoA is, you're not gonna cross more than one threshold, so loss, if any, will be minimal and quickly recovered.
Plus, as @HeavenOhio stated, this is really only affecting Version 8 (and probably 9). And, if you are reporting 0 on all revolvers, you're already wearing the "no revolving balance" penalty, as @FireMedic1 pointed out. Properly execute AZEO and you'll probably see another 10-15 points. (And you'll get points all over for that, not just Version 8.)
So you have a few options and things to consider. As @Brian stated, "Pay your bills on time, don't use your credit, and don't apply for more," and you'll be fine because, even if closing the mortgage barely knocks you outta the 800 club, as @SJ stated, with a little age you'll inch right back in there.
However as @atarvuzdar and I have stated, you can take out a small loan to get bonus points. However, there is no damage from not having an open installment loan on Version 8. It's simply that the majority of people fail to understand what the algorithm is doing.
People organically pay down their only loan, gaining points passing the 6x% threshold, gaining big points when they pass the 8.9% threshold and then when they pay it off, they lose the bonus points from both thresholds (maybe a 3rd) and they flip because they see their Version 8 score dip decent! It is then wrongly assumed that closing a loan kills you.
NO! Having an open installment loan below 9% gives you bonus points! Or (half full/half empty) conversely, not having an OPTIMIZED installment loan causes point loss. You do NOT get points just for having a loan open. It has to pass certain thresholds to award you points.
The one exception is your 1st installment loan, which gives you points for credit mix. Once earned, you don't lose them unless every loan, both open and closed, fall off your report.
@chhull00 is right, you know what to do, you've already done it!
Last, @Jaime123 makes a very compelling argument and I agree. I think having several accounts at the beginning of your credit history is great because it provides an excellent buffer against new account AAoA drops in the distant future once your profile has matured. But, to be fair, everyone doesn't agree with that approach.
There are different strategies and opinions and you must choose which path you want to follow. Some people don't like having 10-15 cards, some enjoy 20-30. Some people are happy with the minimum necessary to optimize scores, which varies by algorithm.
Personally, I think one should have at least 5, so they can optimize most metrics.
GL2U and enjoy pondering your options! 