Is there a list of known thresholds?

[Anonymous]

@Thomas_Thumb Can you get the same points from an installment loan or SSL that you would from a home mortgage?

[Thomas_Thumb]

The installment loan category is allocated a certain number of points. A profile can achieve a Fico 8 score of 850 with a single installment loan of any type on file. That installment loan should be open and substantially paid down. What does substantially paid down mean? That may depend on type of loan. Does each type of loan have the same potential impact on score? That is unclear but some differences likely exist.

Also, the Auto industry option Fico score specifically looks for an Auto loan on file. So if you only have one loan, more potential points may be available if it is an Auto loan vs an SSL.

Scorecard assignment influences points allocation. In particular, clean files shlould see more potential points for having an open installment loan at a favorable B/L than dirty files. It's a bit more speculative to compare potential points allocation among the clean file scorecard segmentations. I do suspect clean files with new accounts react more strongly to changes in loan B/L and revolving utilization.

[Thomas_Thumb]

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@Anonymous wrote:

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@Thomas_Thumb wrote:

My hypothesis is a low installment B/L is a short cut for getting points that would otherwise come over time from payment history/loan age. This could be tested by those that have a single aged loan still above 9% (say 12% and paying down to 8%). Unfortunately, if someone has multiple open loans then other things come into play.

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Your hypothesis was shown to be correct on my scorecard: 17% to 8.47% on 1 SSL increased my TU FICO 8 score +62 points. I went from 666 to 728 in December 2018. 11 monthly payments had been reported and recorded at TU. My profile was only scoreable as of June 2018, or 6 months after I opened the loan.

I opened the loan in December 2017 with absolutely nothing on my credit file prior to that. I applied for my first credit card - from the same CU where I got the credit builder loan - after the score jump. I didn't know about the SSL technique at that time, so I walked into my CU thinking I still had a TU score of 666. I was pretty shocked when they did the HP and told me the current score.

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A 62 point gain is substantially more than available from an SSL paydown to under 8% B/L by itself. The pay down on a "new" loan is typically reported in the 30 to 35 point range. In your case other scoring factors are likely in play. It appears your age of youngest account (AOYA) may have crossed the 12 month threshold. If so, that often results in a score boost of 20 points. Also, if the SSL was your only account at the time then your average age of accounts (AAoA) would have also reached one year. That could also have contributed some points.

[Anonymous]

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@Thomas_Thumb wrote:

A 62 point gain is substantially more than available from an SSL paydown to under 8% B/L by itself. The pay down on a "new" loan is typically reported in the 30 to 35 point range. In your case other scoring factors are likely in play. It appears your age of youngest account (AOYA) may have crossed the 12 month threshold. If so, that often results in a score boost of 20 points. Also, if the SSL was your only account at the time then your average age of accounts (AAoA) would have also reached one year. That could also have contributed some points.

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The SSL was my only account at the time. Thank you for pointing out that those thresholds were also crossed. I was still completely overlooking them, even though today, after reading up on these forums I know they exist. This information will be very important to those new to credit. People with no credit history should know not to try and open any new accounts to get the maximum scoring benefit from a credit builder / share secure loan at the one year mark.

Also noteworthy is that my FICO 8 score at Experian increased by 61 points.

All of the following reports showed AoOA and AAoA at 1 year, just as you expected.

I had 2 reports from 12/04/18:

• Discover creditscorecard.com report showing Experian FICO 8 at 687
• myFICO 1B for TU showing FICO 8 at 666

On 12/23/18 I used the $1 creditchecktotal.com 3B report to get the following FICO 8 scores:

• EQ 750 (0 inq, 1 open SSL with 42.35/500/8.47% balance, no other accounts)
• TU 728 ( 2 inq's under 1 yr at this point, with 1 over 1 yr from 12/07/17, otherwise same as EQ/EX )
• EX 748 (0 inq, 1 open SSL with 42.35/500/8.47% balance, no other accounts)

The next myFICO 3B report on 12/31/18 showed EQ 730, TU 728, EX 729.

The only change at EQ/EX was 1 new inquiry on each.

Tags: new credit, loan, utilization, threshold

[Thomas_Thumb]

At this stage of the game you should be getting some credit cards as they are fundamental to building credit. I recommend two cards (that could serve as long term keepers) as opposed to just one card. That increases spend flexibility and provides a larger foundation for building revolving account history. After 6 months ask for SP CLIs on both cards. Then, after they have aged one year, consider acquiring a 3rd CC.

My DD has two cards only - no loan of any type. Both accounts have now crossed the 3 year mark and her score is in the 760 to 780 range depending on utilization. The majority of people starting out begin with credit cards and then add a loan or loans as needed - such as student loans or an SSL to further boost score.

That being said, starting with a credit builder SSL and then adding revolving accounts is an equally valid approach.

[Anonymous]

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@Thomas_Thumb wrote:

At this stage of the game you should be getting some credit cards as they are fundamental to building credit. I recommend two cards (that could serve as long term keepers) as opposed to just one card.

I have 2 keeper bankcards now  - Mastercard and Visa with a combined $8500CL. AoYA = 2 months.

Next Saturday the Mastercard statement balance will report and I will be able to see whether there is an AoYA 3 month threshold with an approximate +10 points gain as described in this post (and others off-site): Age of Youngest Account 3 month threshold

Every poster reporting a gain like that at 3 months AoYA had an AoOA under 2 years. I'll know soon enough.

[Anonymous]

@CassieCard: you don’t have to wait for the statement to cut, age points will be realized on the first.

[Anonymous]

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@Anonymous wrote:
@CassieCard: you don’t have to wait for the statement to cut, age points will be realized on the first.

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True.  In fact, if one has the ability or desire to isolate the event, pulling their scores on the 1st is the way to go here, prior to any balance change happening or other variable(s) being introduced into the equation.  A score pull on the 1st would isolate any score gain (or lack of) to age of accounts factors increasing by 1 month.  Keep in mind, though, that there are 3 age of accounts factors that all increase 1 month at the same time, thus making it impossible to pinpoint a single one (like AoYA 2 months --> 3 months) as the sole cause for any potential score gain.