@Anonymous wrote:
Just wanted to post this information. Recently closed the only open installment loan on my report (prior to closing was at 2% aggregate) and the effect was -44pts on EQ and -28pts EX.
EQ FICO8: 762 to 718
EQF9: 801 to 767
EQ Auto8: 751 to 695
EQ Auto5: 753 to 757
EQ Mortgage: 751 to 753
EXFico8: 732 to 704
TU Fico8: UNK right now
Anyone wish to take a guess at how many points I can claw back if I open a new installment loan?
A few points less than 44 on EQ and 28 on EX (if you pay it down to 9% before it reports).
But bear in mind that in doing so, you will be affecting yourself negatively in terms of (a) inquiries (b) average age of accounts (c) age of newest account.
Here are the links on how losing the loan and replacing the loan affected my scores:
@Anonymous wrote:
Thanks! Ill post the TU score drops when it updates. I was startled to say the least ....to go from 762 FICO8 to 718 is just heartbreaking. Thats essentially the entire "credit mix" bucket being lost. I guess I can hope to gain back 10 to 20 points if and when I take out a new car loan or SSL.
I would be *very* interested to see your score shift if you tack on an installment loan without prepaying it first, and then when talking SSL make the well-known paydown to the <9% to try to tease out how credit mix really is calculated on FICO 8.
We throw credit mix around a little loosely with FICO 8 but I don't think we've really seen if it's just counting open loans or if that's another part of the algorithm. Sadly it's hard to isolate and as such not sure it's relevant but it is interesting. The problem is unless you (as a clean file) have another recent account you might get re-bucketed as a result of the new account and that can throw off the score tracking.
Wasn't something I could really test myself, found that installment utilization made a difference right before my mortgage and once that landed my reindeer game playing came to an abrupt end. Though in 6 months if I don't make any additional payments I cross the 80% line on my mortgage as the higher tier breakpoint has been pretty elusive in that different people have reported different results.
@Revelate wrote:
@Anonymous wrote:
Thanks! Ill post the TU score drops when it updates. I was startled to say the least ....to go from 762 FICO8 to 718 is just heartbreaking. Thats essentially the entire "credit mix" bucket being lost. I guess I can hope to gain back 10 to 20 points if and when I take out a new car loan or SSL.I would be *very* interested to see your score shift if you tack on an installment loan without prepaying it first, and then when talking SSL make the well-known paydown to the <9% to try to tease out how credit mix really is calculated on FICO 8.
We throw credit mix around a little loosely with FICO 8 but I don't think we've really seen if it's just counting open loans or if that's another part of the algorithm. Sadly it's hard to isolate and as such not sure it's relevant but it is interesting. The problem is unless you (as a clean file) have another recent account you might get re-bucketed as a result of the new account and that can throw off the score tracking.
Wasn't something I could really test myself, found that installment utilization made a difference right before my mortgage and once that landed my reindeer game playing came to an abrupt end. Though in 6 months if I don't make any additional payments I cross the 80% line on my mortgage as the higher tier breakpoint has been pretty elusive in that different people have reported different results.
My experience with losing the installment loan and replacing it was that the EX and EQ mortgage scores did not react at all, while the TU mortgage score reacted like the FICO 8 models but with 20-25% of the strength... e.g. 34 points in TU FICO 8, 62 points in Auto 8, and 42 points in Bankcard8 translated to about 8 points in TU FICO 4.