Installment Loan Score Drop Datapoints

[Anonymous]

Im certain there were no other changes. To answer: Prior to adding the loan AoYA was 1 month same as now. Util on CCs has remained constant at 13% not 10%. I was rounding. AAoA on EQ dropped from 2yrs7mos to 2yrs4mos.

For cards I have 3 CCs and a Navchek. I have been checking FICOs almost daily as I am compiling data. All balances have remained the same - 2 accts with bal's and 2 without any bal. Two other accounts opened in September and those dings already occuured last month

[Anonymous]

I am curious... what credit monitoring service are you using that gives you fresh FICO scores daily on all three bureaus?

When you say that two other accounts opened last month and therefore your AoYA must have been at 1 month beforehand -- is it possible that the dings you observed had to do with inquries for these newly opened accounts?  In other words are you sure that the actual accounts appeared on all three reports within a few weeks of opening them?  That is possible but unusual.  It often takes at least a month (sometimes quite a bit more) for a new account to appear on a report.

What was your AoYA before any of these new accounts appeared?  (E.g. three months ago?)

And you are also certain that your individual utilization on your cards has stayed at under 28.99%?  And that your total util stayed in the ballpark of 12-14%?

Sorry to be so persistent but it is crucial to explore all possible avenues before assuming that it was entirely the new loan.

[Anonymous]

Here are a few more practical questions (i.e. that focus more on your practical desire to have a higher score, what you can do to achieve that, etc. -- rather than the abstract theoretical questions of what might have been going on in the model).

Are you willing to stop applying for more accounts for the next 13 months?  If so, when your AoYA crosses 6 month and certainly when it crosses 12 months you should get some significant help.

Are you willing to pay down your cards so that your total U is under 8.99%?  That too will give you some significant help.

As far as the loan itself, did you obtain that loan purely for credit scoring purposes, or did you actually need the money?  If you got it purely for scoring purposes, we can suggest some tricks that will get you 30-40 points -- namely paying the loan down to under 8.99% of its original loan amount and then keeping it open as long as possible.  The problem is keeping it open -- many lenders will force you to keep making the original payment which will force you to pay the thing off way early.  We know of a few lenders who do not do that, however.

[Anonymous]

I'll try to answer in the form of a timeline (I'll be as close as possible on dates)

Notes: Throughout this timeline, no Inq's and no AAoA Thresholds. Someone asked how I had new accounts with no inq's - softpulls and the hard inq's were on different bureaus. AoYA has been 1 month for literally the last 3 months

Fico8's EQ

Sep-2    - 751 - Util 8.9029% (exact) - AZEO

Sep-5    - 738 - New Acct reports (Acct opened in Aug) and Util goes to 9.66%, 2 cards with bal and 2 at zero

Sep-14  - 762 - Back to AZEO and util drops to 5.55%

Sep-17  - 718 - My only installment loan is closed (was at 2% bal of initial loan since Aug) and Util is still 5.55%

Sep-24 - 712 - Util increases to 13% and now two accounts report balance out of 4 total

Sep-30 - 700 - New installment loan reports (opened August) with 100% balance. Revolving util is still 13%. AAoA goes down to 2.3yrs from 2.6

Additionally, the reason I know it was the loan which caused the ding is because the night of Sep 30th, my TU Fico was 708. The next day I received a FICO update that it increased to 718 (I attribute this to either an inquiry losing its ding or an account aging to a certain threshold). Then, same day midday, loan reported to TU and score dropped to 706. So thats proof in the pudding right there.

Similary, Experian (which is identical to my TU but differs from EQ) overnight increased by 10pts. Those points have not fallen off and the only difference is that the loan has not yet reported to EX.

The way I monitored these FICO's is because I have two services and utilized my free pulls just around midnight on either side. I then paid for a new report mid-day to see the updated score via MYFICO

[Anonymous]

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@Anonymous wrote:

Are you willing to pay down your cards so that your total U is under 8.99%?  That too will give you some significant help.

As far as the loan itself, did you obtain that loan purely for credit scoring purposes, or did you actually need the money?  If you got it purely for scoring purposes, we can suggest some tricks that will get you 30-40 points -- namely paying the loan down to under 8.99% of its original loan amount and then keeping it open as long as possible. 

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I am not so much concerned with the drop as opposed to WHY did it drop. My only thinking is that perhaps it is because it reportedat 100% instead of <99%. I do not understand how one day you can have a negative reason code citing "no open loans" and then the very next day you open a loan, and its now "you have too high balance on your loans" and dings you further.

@Clearly my profile is able to reach 762 FICO8 on EQ with an open loan @ <8%........I experienced a 44 point drop when that loan closed and another 10 points when I opened a new one. Those numbers reflect any util changes (5.5% to 13% which as I understand is only one bracket)

[Revelate]

Assuming nothing else changed (what explicit AAOA old / new?) conjecture would be:

1) Pattern of new accounts

2) Closed installment tradeline satisified credit mix (as in the old days), 100% current / original balance loan is a bigger penalty than no open loan potentially.

Looks like you pulled a 1B report, mind sharing before / after if you have reason codes?

[Revelate]

5.5% to 13% aggregate?  That's 10 points right there quite possibly.

You didn't mention that in your other thread already running on this topic   Merging them.

[Anonymous]

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@Revelate5.5% to 13% aggregate?  That's 10 points right there quite possibly.

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Easily.  I'd ballpark that change closer to 15 points and maybe even 20 on some profiles.

[Thomas_Thumb]

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@Anonymous wrote:

Long story short, I have a clean file with around 2.7yrs AAoA and 13 year oldest account. My only open installment loan closed last month and I lost 30 to 45 points depending on the bureau in question (no other changes)..

So, I just added a personal loan and it just reported at 100% AG. Previously my negative reason codes were "no open non mortgage loans" yet I still lost 10 to 12 points per bureau (only one bureau got hit with the Inq but it was 2 months ago)

The account opening date was in August.

Question is why did I get a ding instead of a boost and when will I start to see an increase?  at <99% AG? The loan is reporting 100% even though I made a payment and is reflected on my statement.

Other DP's:

New accounts last 1 to 2 months:  3

Clean File

No other open loans

10% Util

AAoA 2.7yrs

No new inq's or other accts

No other changes

In other words, the ding is directly related to the addition of the loan.

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It looks like you are the winner of a "too many accounts recently opened" penalty and perhaps a penalty associated with AoYA dropping to zero if AoYA prior to the new accounts was above 12 months. I also expect you experienced a couple inquiry penalties associated with the new accounts. The sum of all the penalties could certainly total 40 points. Please note: Fico has a 30 day buffer associated with loan related inquiries - so there is a delay between the inquiry posting and negative impact on Fico scores

A new loan at 100% B/L certainly can offset the benefit of going from no open loans to one open loan particularly since you have a closed loan on file that positively impacts "mix" to some degree.

[Anonymous]

Neg reason codes:

-When loan was >8.9%: Balance on installment loans is high in relation to the original balance

-When loan was<8.9% it became a positive reason code.

-When loan closed: No open non-mortgage installment loans.

-When new loan opened: Balance on open installment loans too high.

Did you want the other reason codes as well not pertaining to installments?

I have to admit after looking further, the other factor that I missed was that when the new loan reported, my total amounts owed (revolving and installment) increased from around $2,000 to >$20,000. I beleive that is a 5 to point hit and is what caused the score decrease. AoYA did not change nor did AAoA or revolving util. Live and learn! Hoping to pay it down to around 50% to see what if anything happens.