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Installment Loan not reporting: is this hurting my score?

Aspireto850
Established Contributor

Installment Loan not reporting: is this hurting my score?

@thornback 

 

I have an open installment loan that is only reporting on EQ. There is also a closed/paid auto loan on all 3 so am wondering if that loan is satisfying the criteria listed below (Category 1 &2)

 

Since Mortgages are considered 'extra credit' per se I do not believe my mortgage tradelines ( A closed/paid mortgage and an open mortgage on all 3) satifies the initial requirement. Trying to see if I need to contact the Lender to ask they report it to EXP & TU; otherwise, if the closed auto loan is sufficient than I'll leave well enough alone.

 

Thanks

 

-------------------------------

 

B. Mix Diversity

 

For FICO, there are 6 recognized account types (and having at least one of each in the first two categories on your CR is known to satisfy the "Diversity" scoring factor and give bonuses; it appears the addition of a third category or a sufficient number of bankcards could give additional Mix Diversity points.

 

The fifth category is not known to give any additional bonus, and the sixth category is negative and penalizes.

 

i. Revolving (CCs, most PLOCs, HELOCs);

 

ii. Loans (automobile loans, personal loans, student loans, recreational and vehicle loans, Credit builder loans [SSLs], etc.);

 

iii. Open-ended (True Chargecards, although these are classified as a separate category for mix, there is no evidence that it offers additional points).

 

iv. Mortgage Loans Mortgage loans, while installment, are in a category of their own. 

 

v. Retail Accounts While these are typically revolving, they are in their own category and don't seem to offer any additional points.

 









14 REPLIES 14
thornback
Senior Contributor

Re: Installment Loan not reporting: is this hurting my score?

You pose an interesting question-  I've always understood mortgages to be included as an installment for satisfying credit mix requirements - but the wording in the Primer does suggest a caveat exists and I'd like to bring @Birdman7 into this discussion for clarification. 

 

Your closed auto does still count for credit mix. The bonus points we see gained (or lost once paid in full) with open installments comes from low installment util/amounts owed categories.

 

 

Personal Aphorism:
"Forget What You Feel, Remember What You Deserve"


Starting FICO 8s | 09/2017: EX 641 ✦ EQ 634 ✦ TU 647
Current FICO 8s | 11/2020: EX 780 ✦ EQ 771 ✦ TU 781
Current FICO 9s | 11/2020: EX 793 ✦ EQ 780 ✦ TU 778
2020 Goal Score | 800s


My AAoA: 3.8 years not incl. AU / 4 years incl. AU
My AoOA: 7.10 years not incl. AU / 9.10 years incl. AU
Inquiries: EX 0/6 | 1/12 ✦ EQ 1/6 | 2/12 ✦ TU 0/6 | 1/12
Report Status: Clean


Without patience, we will learn less in life. We will see less. We will feel less. We will hear less. Ironically, rush and more usually mean less.
Message 2 of 15
Aspireto850
Established Contributor

Re: Installment Loan not reporting: is this hurting my score?

@thornback  I agree with you. Always thought mortgages were included in 'primary' installment requirement but clearly that not the case. Thanks for adding Birdman to the chat; perhaps he will have some insight.

 

 









Message 3 of 15
Birdman7
Super Contributor

Re: Installment Loan not reporting: is this hurting my score?


@thornback wrote:

You pose an interesting question-  I've always understood mortgages to be included as an installment for satisfying credit mix requirements - but the wording in the Primer does suggest a caveat exists and I'd like to bring @Birdman7 into this discussion for clarification. 

 

Your closed auto does still count for credit mix. The bonus points we see gained (or lost once paid in full) with open installments comes from low installment util/amounts owed categories.

 

 


@thornback From as far as I can tell, those 6 categories are the different recognized categories for the fico algorithms. I can't remember whether I pulled it from MF or a fico document. Negative Reason Codes demonstrate mortgages are evaluated separately for presence and utilization, imho.

 

now, if you didn't have an non-mortgage loan and had a mortgage, it would be just like having a non-mortgage loan and not having a mortgage; it's still another type.


So, as long as you have a card and a mortgage or a card and a non-mortgage loan, you're doing pretty good as you have at least two types, one revolving and one loan.

 

I'm not convinced that a third type is necessary and I have been unable to verify an additional point gain for adding a third type, but I've been unable to rule it out either. 

nevertheless, if you have one or the other and a card, you should be good; if you have all 3, you're maybe better. 

-Community’s scoring wisdom: Scoring Primer.
-New: MORTGAGE SECTION.
-Negative Reason Codes: CassieCard’s Score Factors.
-Calculate metrics with ccquest’s Workbook.

Clean/Thick/Mature/No New Revolver - 8,9; Clean/Thick/Mature/No New Account - 5/4/2.
Correct Ag.Util. under 5% all times. (Oldest/avg varies. Estimates above.)
Real world mortgage maxes are: EQ5-818, TU4-839, EX2-844.



RIP:

(Everything said is JMHO and is not endorsed by FICO or MF. I have no affiliation with either, just a grateful member.)
Message 4 of 15
Thomas_Thumb
Senior Contributor

Re: Installment Loan not reporting: is this hurting my score?


@Aspireto850 wrote:

@thornback 

 

I have an open installment loan that is only reporting on EQ. There is also a closed/paid auto loan on all 3 so am wondering if that loan is satisfying the criteria listed below (Category 1 &2)

 

Since Mortgages are considered 'extra credit' per se I do not believe my mortgage tradelines ( A closed/paid mortgage and an open mortgage on all 3) satifies the initial requirement. Trying to see if I need to contact the Lender to ask they report it to EXP & TU; otherwise, if the closed auto loan is sufficient than I'll leave well enough alone.

 

Thanks

 

-------------------------------

 

B. Mix Diversity

 

For FICO, there are 6 recognized account types (and having at least one of each in the first two categories on your CR is known to satisfy the "Diversity" scoring factor and give bonuses; it appears the addition of a third category or a sufficient number of bankcards could give additional Mix Diversity points.

 

The fifth category is not known to give any additional bonus, and the sixth category is negative and penalizes.

 

i. Revolving (CCs, most PLOCs, HELOCs);

 

ii. Loans (automobile loans, personal loans, student loans, recreational and vehicle loans, Credit builder loans [SSLs], etc.);

 

iii. Open-ended (True Chargecards, although these are classified as a separate category for mix, there is no evidence that it offers additional points).

 

iv. Mortgage Loans Mortgage loans, while installment, are in a category of their own. 

 

v. Retail Accounts While these are typically revolving, they are in their own category and don't seem to offer any additional points.

 


You are losing Fico points on CRAs that don't show an open installment loan of any type. My data suggests the penalty is greater on TU and EQ than EX. I paid off my only open loan (a mortgage) in November. The below is EQ BCE Fico 8. The initial deep dip is due to a high reported revolving utilization in combination with the loan closure. Subsequent months are at low revolving utilization with no open loan. The open mortgage absolutely helped my Fico 8 scores - so get it reporting on all three CRAs.

 

@Aspireto850 

BTW - a mortgage is an installment loan. The "Lack of recent installment loan information" only showed up after the mortgage was paid off. I have had multiple mortgages but, never any other type of loan since 1989. [You don't need to have an open mortgage to satisfy the "recent installment" criteria ... but an open mortgage is an installment and should satisfy the "recent installment" criteria by itself.] Side note: The industry enhanced Auto Fico versions specifically want to see an Auto loan. However, lack of said loan is minimal.

 

AT&T score history 2-2021.jpg

Fico 9: .......EQ 850 TU 850 EX 850
Fico 8: .......EQ 850 TU 850 EX 850
Fico 4 .....:. EQ 809 TU 823 EX 830 EX Fico 98: 842
Fico 8 BC:. EQ 892 TU 900 EX 900
Fico 8 AU:. EQ 887 TU 897 EX 899
Fico 4 BC:. EQ 826 TU 858, EX Fico 98 BC: 870
Fico 4 AU:. EQ 831 TU 872, EX Fico 98 AU: 861
VS 3.0:...... EQ 835 TU 835 EX 835
CBIS: ........EQ LN Auto 940 EQ LN Home 870 TU Auto 902 TU Home 950
Message 5 of 15
Birdman7
Super Contributor

Re: Installment Loan not reporting: is this hurting my score?

@Aspireto850 I definitely agree that you're leaving points on the table if you do not have an open loan reporting (mortgage or non-mortgage), but I believe that derives from the amounts owed category rather than mix. 

 

Edited

 

TT thoughts?

-Community’s scoring wisdom: Scoring Primer.
-New: MORTGAGE SECTION.
-Negative Reason Codes: CassieCard’s Score Factors.
-Calculate metrics with ccquest’s Workbook.

Clean/Thick/Mature/No New Revolver - 8,9; Clean/Thick/Mature/No New Account - 5/4/2.
Correct Ag.Util. under 5% all times. (Oldest/avg varies. Estimates above.)
Real world mortgage maxes are: EQ5-818, TU4-839, EX2-844.



RIP:

(Everything said is JMHO and is not endorsed by FICO or MF. I have no affiliation with either, just a grateful member.)
Message 6 of 15
Aspireto850
Established Contributor

Re: Installment Loan not reporting: is this hurting my score?

@thornback  Thanks

 

@Thomas_Thumb  Thought I was clear until I read your post Smiley Happy. The 'primers' listed in my original post doesn't include mortgage in the category type 1 or 2 that is required but rather gives bonus points for it. At least that's my interpretation of what I read. All my credit reports give me a green for credit mix; nonethless, still asking the question.

 

here's what i have:

  • open mortgage account (reporting on all CBs)
  • Open installment loan (reporting on EQ only)
  • closed installment loan  (reporting on TU & EXP)

Am I getting the max amount of points for this category? 

 

Thanks for the info. Stay safe.









Message 7 of 15
Birdman7
Super Contributor

Re: Installment Loan not reporting: is this hurting my score?


@Aspireto850 wrote:

@thornback  Thanks

 

@Thomas_Thumb  Thought I was clear until I read your post Smiley Happy. The 'primers' listed in my original post doesn't include mortgage in the category type 1 or 2 that is required but rather gives bonus points for it. At least that's my interpretation of what I read. All my credit reports give me a green for credit mix; nonethless, still asking the question.

 

here's what i have:

  • open mortgage account (reporting on all CBs)
  • Open installment loan (reporting on EQ only)
  • closed installment loan  (reporting on TU & EXP)

Am I getting the max amount of points for this category? 

 

Thanks for the info. Stay safe.


@Aspireto850 The Scoring Primer says it could offer additional points, not that it does or that it will.

 

we know you get Mix points for having a non-mortgage loan and for having Revolvers, and the number of bankcards can influence Mix.

 

It also seems mortgages satisfy  the diversity requirement, just like a non mortgage loan would, but I can't conclusively say whether or not you would earn additional points by having one from both categories. It would be kind of hard isolate due to the amounts owed factor coming into play.

but in my humble opinion, if you have mortgage loan on all 3, you should be good as far as Mix. But the amount owed is not going to give you full points until you're under 10% threshold, Aggregate.

 

jmho. 

 

  and maybe I should update the language to reflect having Revolvers and a non-mortgage loan/mortgage loan. 


@Aspireto850 Edit: by the way, since you still have a closed installment on the other 2, you're still getting the Mix points for it. But by having it open, you can also get points from the Amounts Owed category imo. 

 are there any differences among the 3 bureaus for your CRs, other than the installment loan not reporting on the other two?

-Community’s scoring wisdom: Scoring Primer.
-New: MORTGAGE SECTION.
-Negative Reason Codes: CassieCard’s Score Factors.
-Calculate metrics with ccquest’s Workbook.

Clean/Thick/Mature/No New Revolver - 8,9; Clean/Thick/Mature/No New Account - 5/4/2.
Correct Ag.Util. under 5% all times. (Oldest/avg varies. Estimates above.)
Real world mortgage maxes are: EQ5-818, TU4-839, EX2-844.



RIP:

(Everything said is JMHO and is not endorsed by FICO or MF. I have no affiliation with either, just a grateful member.)
Message 8 of 15
Thomas_Thumb
Senior Contributor

Re: Installment Loan not reporting: is this hurting my score?

I think mortgages are treated differently from other loans with regard to amount owed. I never saw a score improvement taking my mortgage balance/loan ratio from 40% => 30% => 20% => 10% => 5% => 2% => 1%. I believe the way this loan type treats amount owed is one reason why it is differentiated from other loan types. The other reason being loan duration.

 

The penalty associated with no open loan is a bit like no revolving credit cards with reported balances. Not sure how that correlates to amount owed. The Fico model(s) don't recognize point in time activity and default to a no recent experience penalty. Closest category is the one associated with file age/history IMO.

 

Fico 9: .......EQ 850 TU 850 EX 850
Fico 8: .......EQ 850 TU 850 EX 850
Fico 4 .....:. EQ 809 TU 823 EX 830 EX Fico 98: 842
Fico 8 BC:. EQ 892 TU 900 EX 900
Fico 8 AU:. EQ 887 TU 897 EX 899
Fico 4 BC:. EQ 826 TU 858, EX Fico 98 BC: 870
Fico 4 AU:. EQ 831 TU 872, EX Fico 98 AU: 861
VS 3.0:...... EQ 835 TU 835 EX 835
CBIS: ........EQ LN Auto 940 EQ LN Home 870 TU Auto 902 TU Home 950
Message 9 of 15
Birdman7
Super Contributor

Re: Installment Loan not reporting: is this hurting my score?


@Thomas_Thumb wrote:

I think mortgages are treated differently from other loans with regard to amount owed. I never saw a score improvement taking my mortgage balance/loan ratio from 40% => 30% => 20% => 10% => 5% => 2% => 1%. I believe the way this loan type treats amount owed is one reason why it is differentiated from other loan types. The other reason being loan duration.

 

 


@Thomas_Thumb you may be exactly right & as you have taught us before, loans can offer points independent of utilization. 


Do you think if somebody immediately paid down a mortgage rather than waiting years that there might be a different result? Do you think the mortgage may have been treated that way because it was being paid off organically?

-Community’s scoring wisdom: Scoring Primer.
-New: MORTGAGE SECTION.
-Negative Reason Codes: CassieCard’s Score Factors.
-Calculate metrics with ccquest’s Workbook.

Clean/Thick/Mature/No New Revolver - 8,9; Clean/Thick/Mature/No New Account - 5/4/2.
Correct Ag.Util. under 5% all times. (Oldest/avg varies. Estimates above.)
Real world mortgage maxes are: EQ5-818, TU4-839, EX2-844.



RIP:

(Everything said is JMHO and is not endorsed by FICO or MF. I have no affiliation with either, just a grateful member.)
Message 10 of 15
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