Installment loans

[medicgrrl]

Do unsecured installment loans get put in a different category for scoring purposes on FICO 8 vs auto loans? My Experian score dropped 11 points after my son's car loan updated to paid. I have 2 auto loans. His was just under 69% remaining balance and mine is 70%. I didn't think it would affect my score because I also have an installment loan at 75%.

[HeavenOhio]

There are a number of ways that installment loans count, but the one we talk about the most is "installment utilization" (for lack of a better name). That's when you add up the total of all your installment balances and divide them by the total of the original loan amounts. My guess is that closing the loan that was almost paid off caused your installment utilization to go up.

I don't believe that the FICO 8 classic scores differentiate an auto loan from an unsecured installment loan. However, some of my auto scores specifically complain about my lack of an auto loan, which indicates that auto loans vs. other loans may come into play on those scores.

[ldkcivilservant]

No, they are coded as installment loans and are lumped together.

You score dropped most likely because there was a low util loan on your file, and now it's paid off. Your lowest util remaining loan is somewhat higher, across scoring thresholds, and therefore you now have a higher aggregate balance.

JMO.

[medicgrrl]

The interesting thing is that my aggregate util went from 70.4 to 73. It's an odd threshold.

[Anonymous]

Are you certain there were no other changes?

[medicgrrl]

It's the only change. One thing I figured out is that the 2 car loans alone had a util of 66% but mine alone is 70%. TU updated today and I dropped 9 pts. My auto loan should update in the next couple of days and will be below 70% with this update. I'm curious to see if I get any points back.

[Anonymous]

Thats exactly whre the threshold is believed to be.

[medicgrrl]

Yes, but I thought it includes all installment loans. I have an unsecured loan and had 2 auto loans. Now I've got an unsecured and 1 auto loan. My 2 remaining loan's are above 70% and the three together were also above 70%. The only thing I can figure that makes any sense is that if I calculate only the auto loans, I was below 70% and now I'm at 70%.

[Anonymous]

I don’t know, I’m just speculating here but maybe there are a couple points given when individual installment utilization pass the breakpoint? Do you know what scorecard you’re on?

I’m sorry I misunderstood I thought you said your aggregate was 60 something before it closed and 70 after it closed. But if it was over 70 before and after, then either something else changed or like I said maybe there’s some points for individual as well, but again what scorecard are you on because I’ve only seen a couple points for installments closing and opening with high utilization on my old thick scorecard. Small enough that I didn’t even necessarily assume causation.

[medicgrrl]

Thick file, no derogs and score's were nearing 800. All three have updated now with losses of 9-11 pts. Found it interesting. I'm guessing it's from my aggregate going from under 70 to over 70. I'll update in a few days after my auto loan updates.