@jamie123 wrote:This is new territory in the FICO scoring system decoding. I don't recall anyone taking the interest and puting in the effort to find this out in the past. All we ever heard on the forums was : "I paid off my installment loan and my score dropped XX points!" (With no good reason why. Only speculation.)
Now we know how to gain points cheaply by using a share secured installment loan. THAT IS HUGE!
I think everyone has been put off by the patience it takes to test this theory. Look at us, we've been kicking this around for more than a year! I don't think many people were aware of just how many points are involved in doing this! They all want the "Okay what card do I apply for now?" to raise their scores answer.
This could/should become part of the process for a person trying to rebuild their credit or someone trying to maximize their mortgage scores. It also would look good in a manual review.
Well to be fair the only mortgage score it appears to affect is Experian because the GSE's are still underwriting on EX 98 (FICO Risk Model v2).
All of my data suggests, and incidently it matches with the old school FICO 04 testers when Scorewatch here was Beacon 5.0, that installment utilization doesn't matter at all on FICO 04 and we didn't see it earlier in my TU data though I'll go double-check that. I didn't see drops on my DCU score when my loans reported paid, and I didn't see increases here. It's possible there's an open vs. closed marker, but it doesn't appear to be tied with the utilization on installment tradelines.
Also the big elephant in the room still is what happens when a mortgage gets tacked on? Do all my scores suddenly tank (guess better get that CSP app out of the way sooner rather than later haha, though I may hold off on anything else, this data point could just be too darned interesting to pass up and the cards I need other than that one will still be there in six months) or does a mortgage get counted seperately?
It might be awesome for rebuilders and those without open installment loans, but once someone's gained access to the real estate market might be of limited value since the size of mortgages will dwarf every other installment loan. I'm 100% confident that auto loans are counted the same as these secured loans we're testing from my double downward dog a year ago on my scores when my auto and then old secured loan closed. First time auto loan buyer for someone that doesn't have a slew of SL's or whatever, this is nothing but goodness... and even a boost to 1/3 of the mortgage trifecta is definitely a good thing. Someone would have to retest the all credit cards, track a new installment loan being added and see what sort of boost mix of credit got, and then make the payment for full monty as there are tradeoffs with any new account... neither of us can do that anymore.
As another note, I had the "remaining balances on your mortgage or non-mortgage installment lines are too high" on all of them and that reason code is flat out gone on all EX / EQ entries. TU still hasn't updated yet, though I would suspect the data there will follow identically to the EQ pull. So guess we'll see in a few months if that comes back for me, but your course should be set leading into a mortgage for sure bud, and this will help others too almost guarunteed, just not everyone today.
If the GSE's move to FICO 8 though, well... 
@Revelate wrote:So a number of us have been kicking around the idea that installment tradelines have utilization metrics associated with it; I got a VERY interesting data point with regards to that today, so rather than tracking down the old threads I'm starting a new one for tracking purposes.
As some of you know I'm going through the mortgage process so my files are pretty darned clean, and I've gotten 3 mortgage inquiries on each report, and my score has not moved downward as a result on any score model. Where things went sideways today, is that today I got a +8 point boost (for a reported inquiry haha) on Experian, and I managed to check that yes indeed my USAA payment to try to test this had reported on that one report only (CK verification of other two). So with this opportunity to get a single bureau isolated with a change compared to other two to really try to hit this, paid the two yuppie food stamps.
I didn't have the granularity to be able to test whether this was an individual or aggregate installment loan utilization issue, but there's virtually no other explanation with my report that I have for it, and 99.9% confident that some of the talking heads who over the years have babbled about it (youtube credit folks), are indeed correct and there are breakpoints somewhere in the range of ~80% - ~66% (thank you Jamie!) either individual or aggregate. Plausibly both, but I'm leaning towards aggregate only but that definitely needs more data both to determine that but also to dial in the breakpoint.
5/24 - 5/29 change:
- 1 account -> 2 accounts reporting a balance
5/29 - 6/25 change:
- +3 mortgage-related inquiries on all reports,
- 2 accounts -> 1 account reporting a balance (and just as before TU Bank 4 moved identically) on all reports.
- Alliant installment loan $415 -> $407 on EX/EQ, not on TU
- USAA installment loan $2073 -> $1533 on EX only
Experian Installment Change Dates Current Original Percentage remaining 24-May Alliant 415 500 83 and 5/29 USAA 2073 2500 82.92 pulls Total 2488 3000 82.93 6/5 pull Alliant 407 500 81.4 USAA 1533 2500 61.32 Total 1940 3000 64.67
Also FICO dumpage!
Score 24-May 29-May 5-Jun Notes EQ 8 690 690 690 EQ 5 700 700 700 EQ Auto 8 701 701 701 EQ Auto 5 697 697 697 EQ Bank 8 705 705 708 Beats me EQ Bank 5 721 721 721 TU 8 706 706 706 TU 4 731 731 731 TU Auto 8 728 728 728 TU Auto 4 746 746 746 TU Bank 8 723 723 723 TU Bank 4 745 740 745 Back to 1 Revolver w/balance EX 8 712 712 720 Installment Utilization! EX 2 725 725 728 EX Auto 8 717 717 728 EX Auto 2 741 741 746 EX Bank 8 726 726 739 EX Bank 3 697 697 697 EX Bank 2 739 739 741
All looks good but when my car installment goes down to 80-60%, I'm most likely going to trade it in and start all over again. Moto installment is just getting paid off. I would think most of working consumers are trading in their auto loans for upgrades as well. This should not be a big impact if not for just that reason. I would not throw more money into that installment loan since it's to the wind. Now my next auto installment will be eventually pif. Guess I'm not going to see any improvement in this area for quite some time. 
@Anonymous wrote:All looks good but when my car installment goes down to 80-60%, I'm most likely going to trade it in and start all over again. Moto installment is just getting paid off. I would think most of working consumers are trading in their auto loans for upgrades as well. This should not be a big impact if not for just that reason. I would not throw more money into that installment loan since it's to the wind. Now my next auto installment will be eventually pif. Guess I'm not going to see any improvement in this area for quite some time.
Ah my doubting friend, you could still game it by taking out a non-trivial loan you didn't need and paying most of it right back; auto loans are not so large as to break things so badly as mortgages. There's rumors that I can get a secured loan from SDFCU, and as I pay it off it releases the funds... I'll so stick my emergency fund (or even more) and do this exact thing if that's the case, temporarily tying up 20K on it's way somewhere else for a month or two if this accurate, not a problem. Not sure on that one though, but it's something I'll look at.
I don't agree with the assertion though that most consumers trade in their cars every couple of years, this is not smart financially and people haven't been able to afford that in recent years. I'd be willing to bet the percentage of consumers holding their loans to term is a lot higher now than it was last decade, would have to go look at the used car industry data though I guess to try to see that... then again I'd be a hypocrite if I stated I didn't appreciate people's doing this, go bleed out most of the depreciation in a vehicle and let me pick it up after that fact as used, thank you 
.
ETA: can do this either unsecured or secured; some advantages and disadvantages to each, though I just noticed Alliant has freed up most of my underlying savings deposit post major paydown, is keeping 2X the current loan balance.
@jamie123 wrote:Time for an update...
To refresh your memory, I was testing the 66% remaining balance to starting balance ratio. We wanted to see if I could get a score boost by going from 68.4% aggregate remaining balance to under the 66% threshold. I am now at 60.8% aggregate remaining balance on EQ and I DID NOT see a score change. My EQ 08 score is steady at 705. Just for laughs, both TU and EQ scores at CK are also steady at 773.
I checked my TU and EQ reports on CK this morning and also found that Alliant might not report to ALL the CRAs each month. My TU CK report shows an Alliant balance of $389 when it should be $334 as EQ shows.
The current balances on the 2 loans are as follows:
Alliant $334/$500
SDFCU $274/500
Aggregate $608/$1000
Another kink I discovered today:
The autopay is still happening with Alliant even though the due date had been pushed out to 10/1/2015 by my extra payment. They autopaid $11 on 7/1/2015 and my next due date has been changed to 11/1/2015. It seems we have to turn autopay off if we want to play this game.
Where should we go from here? I have until September to keep playing and then I must pay them down to make sure that I get any extra points that I will need for a possible mortgage app in September.
I was thinking to wait a week to see if the CK TU report picks up the correct data on the Alliant loan then pay both loans down to just under $250 or 50% to see if that is the threshold. What do you think?
Oh that's good to know on Alliant; I will double-check that this month (7/21 historically) and will whack the auto pay if needed. Actually really no reason for me not to do that now just need to figure out where to cancel it as their site has changed slightly but perhaps substantially for this little thing.
Working theory based on user reports is 80% and 10%. Only have a few people submitting datapoints but the changes are so large this shouldn't be hard to test, we're not talking numbers in the margins like number of revolvers with balances when people are seeing 15-25 point swings at the 10% line on their FICO 8 monitoring solutions.
On the premise mortgage is way more important just do two tests unless you're absolutely confident you can get three reports test th aggregate, including some style points for individual tradeline testing.
1) 24%: $40 and $200 on two lines
2) 9% or less, $40 and $40 on both and if you get the bump which you should based on everyone's data so far, just take the money and run with the mortgage.
The breakpoints are actually kind of irrelevant based on the real-world strategy other than just figuring out the algorithm in more detail... if we know absolutely that 9% is a good number, we take out the loan and pay it right back to that number and it really doesn't matter. Granted we could likely eek out a few more payments towards the end of the loan if we didn't have to pay it down so far but *shrug* few extra months on a random loan isn't going to make or break anyone's file.
I really only have one more test until mortgage reports, once I close just pay off the USAA loan and see if I take a drop or whether the prettily reporting Alliant loan prevents that.
Are you sure re: Alliant?
I apparently was an idiot before and utterly missed this or maybe it took some time to refresh but my Scheduled Transfers has the following which looks just ducky:
| 10/21/2018 | Savings Account - S01 | Share Secured Loan - L01 | Monthly | $9.16 | Edit | Delete |
@Revelate wrote:Are you sure re: Alliant?
I apparently was an idiot before and utterly missed this or maybe it took some time to refresh but my Scheduled Transfers has the following which looks just ducky:
10/21/2018 Savings Account - S01 Share Secured Loan - L01 Monthly $9.16 Edit | Delete
Yeah? 
Well mine looked just ducky too when it said the next due date was 10/1/2015. Now it says this:
Because they took another autopay on 7/1/2015 like this :
Oh, that's, well, a rather lame implementation that if I was truly concerned by that I'd bug them to go fix it but since I'd rather not attract attention on this one, just going to cancel it .
Thanks for the headsup!
ETA: Hahaha
So I can't setup a recurring transaction between the accounts except based on their timing and on the full payment amount; however, I can do this:
| 01/01/2016 | Savings Account - S01 | Share Secured Loan - L01 | Future | $1.00 | Edit | Delete |
| 07/01/2016 | Savings Account - S01 | Share Secured Loan - L01 | Future | $1.00 | Edit | Delete |
I also need to try scheduling a new recurring transfer and see if that pulls in the future date correctly, looks like it does but could likewise be a bug (or feature) like you stumbled on.'
Or real implementation issue:
We're having a problem scheduling your Transfer at this time
A recurring transfer cannot be scheduled for more than 1 year in the future We're having a problem scheduling your Transfer at this time
Oh well, figure I can be bothered to check my Alliant accounts twice a year to prevent future issues 
@jamie123 wrote:I just thought of a way to do it.
@Pay the loan down to about $96. That would make it over the 80% paid off theshold. Set up monthly auto payments @ $2.00 per month for a 4 year loan or $1.60 per month for a 5 year loan.
You could actually take the remaining term as in my case is 36 months. $96 divided by 36 is $2.67 per month and do it that way.
This way payments keep being made every month and you don't have to worry about the account going dormant.
Can you do that in SDFCU's interface? Can't in Alliant's from what I just tried, it's regular payment or bust on a recurring transfer unless you want to set up all that by hand which seems like a whole lot of work for something I can solve just by logging in once every couple of months to check my Vantage Score reason codes if nothing else and verifying my payment did actually get made every sixish months.
Least from their fee disclosures the inactivity penalty is assessed on a rolling 1 year window, and as such any activity in / out (I could schedule a recurring transfer from my Chase account in theory too) should prevent that from happening.
Trying to solve this with the least amount of effort possible, I'm lazy like that