Installment Loan Threshold

[Anonymous]

Good Morning, I just refinanced my auto loan to a lower rate. Now it's going to show "High Loan Balance."

Are there threshold you cross for FICO Scoring that helps credit scores? Or is the only threshold 8.9% utilization and any percentage above count the same?

[Horseshoez]

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@Anonymous wrote:

Good Morning, I just refinanced my auto loan to a lower rate. Now it's going to show "High Loan Balance."

Are there threshold you cross for FICO Scoring that helps credit scores? Or is the only threshold 8.9% utilization and any percentage above count the same?

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I've run across a few threads on this issue, don't quote me on the thresholds, but if I recall correctly they are something like:

• <89%
• <69%
• <49%
• <29%
• <19% (I think this one is unproven at this point but I'm pretty sure I've seen a datapoint or two suggesting this threshold exists)
• <9%
• <5% (this one is still in question as well)

[Anonymous]

Perfect, Thank you! I vaguely remember something about 89% and 69%, but wasn't entirely sure.  Thanks again!

[SouthJamaica]

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@Anonymous wrote:

Good Morning, I just refinanced my auto loan to a lower rate. Now it's going to show "High Loan Balance."

Are there threshold you cross for FICO Scoring that helps credit scores? Or is the only threshold 8.9% utilization and any percentage above count the same?

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IMHO the only significant threshold is getting down to 9%.

There may be very slight improvements as you go down, like 2 or 3 points here and there, but I didn't experience any solid evidence of any, and I've tested for them 3 or 4 times.

[Anonymous]

Take heed to what @SouthJamaica  has to say on this as he had a running post showing results. IIRC it showed High Balances all the way down to 9%.

[OmarGB9]

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@Horseshoez wrote:

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@Anonymous wrote:

Good Morning, I just refinanced my auto loan to a lower rate. Now it's going to show "High Loan Balance."

Are there threshold you cross for FICO Scoring that helps credit scores? Or is the only threshold 8.9% utilization and any percentage above count the same?

---

I've run across a few threads on this issue, don't quote me on the thresholds, but if I recall correctly they are something like:

• <89%
• <69%
• <49%
• <29%
• <19% (I think this one is unproven at this point but I'm pretty sure I've seen a datapoint or two suggesting this threshold exists)
• <9%
• <5% (this one is still in question as well)

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Those are for credit cards. Installment loans have far less, just <9% and under 69% I believe. @Anonymous knows more.

[SouthJamaica]

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@Anonymous wrote:

Take heed to what @SouthJamaica  has to say on this as he had a running post showing results. IIRC it showed High Balances all the way down to 9%.

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Yes indeed. I kept getting a negative reason code for 'high installment loan balances', even when I was down to only 14%. Only when I got it down to 9% did I get my bonus.

[Anonymous]

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@OmarGB9 wrote:

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@Horseshoez wrote:

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@Anonymous wrote:

Good Morning, I just refinanced my auto loan to a lower rate. Now it's going to show "High Loan Balance."

Are there threshold you cross for FICO Scoring that helps credit scores? Or is the only threshold 8.9% utilization and any percentage above count the same?

---

I've run across a few threads on this issue, don't quote me on the thresholds, but if I recall correctly they are something like:

• <89%
• <69%
• <49%
• <29%
• <19% (I think this one is unproven at this point but I'm pretty sure I've seen a datapoint or two suggesting this threshold exists)
• <9%
• <5% (this one is still in question as well)

---

Those are for credit cards. Installment loans have far less, just <9% and under 69% I believe. @Anonymous knows more.

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^^^^ @OmarGB9 correct those are for credit cards, and the 5% is maybe the most proven one. For loans, it's 10% and 65%, I believe, although there are some other small ones like 87 or 88%. 

[TravelNut]

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@Anonymous wrote:

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@OmarGB9 wrote:

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@Horseshoez wrote:

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@Anonymous wrote:

Good Morning, I just refinanced my auto loan to a lower rate. Now it's going to show "High Loan Balance."

Are there threshold you cross for FICO Scoring that helps credit scores? Or is the only threshold 8.9% utilization and any percentage above count the same?

---

I've run across a few threads on this issue, don't quote me on the thresholds, but if I recall correctly they are something like:

• <89%
• <69%
• <49%
• <29%
• <19% (I think this one is unproven at this point but I'm pretty sure I've seen a datapoint or two suggesting this threshold exists)
• <9%
• <5% (this one is still in question as well)

---

Those are for credit cards. Installment loans have far less, just <9% and under 69% I believe. @Anonymous knows more.

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^^^^ @OmarGB9 correct those are for credit cards, and the 5% is maybe the most proven one. For loans, it's 10% and 65%, I believe, although there are some other small ones like 87 or 88%. 

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@Anonymous  For the loans on the 10% & 65% I assume that is aggregate and not individual?

I just had an installment loan go paid in full and then closed so my Loan utilization went from 63% to 74% which made me lose up to 6 points accross my mortgage scores.  I had 4 opened loans and now I'm down to 3 open which is why my Utilization went up.  Sounds like to recapture those points would be to bring the Loan util down to 65%?

[805orbust]

@SouthJamaica I was following that thread a few years ago when you started it... Didn't realize you had that reason code show up as far down as 14%. I remember the impact as you passed thresholds. You only saw a few points gain as you passed them?

I don't know why I remember the gains being larger.  May have just been excitement as I purchased a car at the same time and seeing what you were doing literally made me toss extra money at it and knock it out early. 😆